Following a visit to the United Arab Emirates by Seychelles President Wavel Ramkalawan, Air Seychelles (HM, Mahé) will not have to make any payments to Etihad Airways (EY, Abu Dhabi Int’l) during 2021 while debt negotiations continue between the two sides, the president’s official State House website revealed on February 22.
Ramkalawan made the official visit over the weekend accompanied by Sylvestre Radegonde, Seychelles’ minister of foreign affairs and tourism.
“In relation to the Air Seychelles and Etihad partnership agreement, no payment will be effected this year, and further negotiations are ongoing in regards to the mode of payment for the debt accumulated and for the return of the Etihad shares in order to reinstate the country’s national carrier as a fully Seychellois-owned entity,” the statement said without adding further details.
The visit also guaranteed the supply of further doses of a coronavirus vaccine, which “will place the island nation in the western Indian Ocean on target to achieve its goal of vaccinating 70,000 of its people in order to attain herd immunity and resume tourism activities by mid-March.” In addition, the UAE confirmed support to Seychelles through a team of technicians to review two hospital projects.
“The president has also sought budget support from the UAE government either as a grant or a soft loan. A reply will soon be communicated,” the site said.
Air Seychelles is currently a 60/40 venture between the government and Etihad Aviation Group’s EAG Investment Holding Company Limited (EAGIHC). When it bought its stake in 2012, the Etihad unit provided USD25 million as a loan, a significant discount on which has since been negotiated. Separately, as part of the Etihad Equity Alliance, Air Seychelles was party to a bond through which it currently owes USD72 million to bondholders, who have so far been unwilling to accept drastically revised terms.
As previously reported, during a debate in January at the National Assembly, Seychelles’ legislative body, Secretary of State for Finance Patrick Payet recommended that the way forward for the government was to agree with Etihad for the airline to become 100% government-owned, while also continuing talks with the bondholders.