MIAMI – Air Seychelles (HM) is in serious trouble after EA Partners bondholders, detaining rights for over US$70m, have petitioned for the liquidation of the airline. HM is expected to appear before the Supreme Court at an undisclosed date next month.
The HM debt by HM is part of total debt of US$1.2bn, contracted by Ethihad Airways (EY) on behalf of airlines, namely HM, Alitalia (AZ), and Air Berlin (AB), at the time partly owned by EY. In the case of HM, Abu Dhabi’s EY owned, with a consortium of other Gulf airlines, 40% of the carrier and borrowed money on its behalf thru EA Partners.
A Fair Resolution
Air Seychelles has since been re-nationalized and a meeting between high-level government officials and the airline’s Board of Directors has been announced to discuss “debts owed to EA Partners bondholders.” The creditors have signified the airline their readiness to “reach a fair and equitable resolution of the debt issues.”
Apparently and according to the bondholders, nothing has happened to leave as the “only viable option” to petition for liquidation and seek recovery of the amount due, the petition having been “served and acknowledged” by HM. The airlines, at the moment of its renationalization, passed thru the waiver by EY of 79% of the debts contracted by HM which, at the time, owed US$72.3mn to the Abu Dhabi airline, an HM shareholder since January 2012.
Other Airlines in Similar Situations
The Seychelles government renewed its commitment to take measures to protect HM workers with further announcements to be made this Friday, August 27. The government also reassuring stakeholders and all concerned that measures will be taken to ensure the continuity of airport services in a normal and uninterrupted manner.
HM is not the only airline targeted by the EA Partners bondholders as they are seeking to recover US$1.2bn owed by airlines, in which EY had consistent stakes. Air Serbia (JU) has repaid the totality of its debt but this is not the case for AZ, already under liquidation, and the now-defunct German carrier AB.
Article sources: Air Journal and Reuters
Featured image: Air Seychelles Airbus 320 neo S7-PTI – Photo: Air Seychelles via facebook