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Air Seychelles Exit Administration

The Ministry of Transport is proud to announce that Air Seychelles is exiting Company reorganization (Administration) after it has successfully been able to pay off its debts and reached financial stability. This is through the collective effort of the Ministry, Administrators, the Air Seychelles’ board, management, staff members and legal counsel.

This follows an Air Seychelles creditors meeting on the 25th October 2022 where the Creditors (AS SPV Limited, Nouvobanq and Government of Seychelles) unanimously approved the rescue plan, after which Air Seychelles could be removed from Company Reorganisation (Administration).

The Supreme Court of Seychelles approved the rescue plan on the 7th November 2022 and the Board of Air Seychelles executed the rescue plan on the 8th of November 2022.

Ministry of Transport Seychelles

At the start of the Administration, Air Seychelles net assets position was negative USD 85m. After the execution of the rescue plan, this improved to a positive net asset position in excess of USD 12m. This marks an exceptional improvement of the company’s financial position by over USD 96m.

The way forward for Air Seychelles is that it operates profitably and sustainably without direct funding from the Government of Seychelles and continues its current good performance.

The Government of Seychelles has declared Ground handling as a national asset, and as such, the rescue plan includes ringfencing through the acquisition and transfer of these assets to the Government of Seychelles to ensure continuity of the critical gateway into Seychelles. Air Seychelles will continue to perform the ground handling operations exactly as before, except it will lease rather than own the ground handling equipment. 

Context

In 2015, Air Seychelles entered into a facility agreement with EA Partners I B.V. for USD   21,539,000. The following year, Air Seychelles entered into another facility agreement with EA Partners II B.V. for USD 50,000,000. This resulted in a total financing of USD 71.5m.

In April 2021, Government of Seychelles agreed to purchase the debt owed by Air Seychelles to Etihad of USD 70,233,011 for a price of USD 13,063,185 (a discount of about 81%) and simultaneously purchase Etihad Airways’ 40% stake in Air Seychelles for USD 1 to become the sole shareholder.

Due to the financial constraints imposed by the Covid-19 pandemic, Air Seychelles defaulted on the principal debt obligation to EA Partners I B.V. and II B.V. (the Bondholders). Consequently, a winding-up petition was served against Air Seychelles on 19th August 2022 by the Bondholders. In October 2021, the board resolved that the company enters into Company Reorganization with the appointment of Mr. Bernard Pool and Mr. Suketu Patel as Administrators.

On the 7th December 2021 a rescue plan was presented to the creditors by the Administrators and involved a haircut of 66.66% of amounts due to the bondholders. Government of Seychelles as creditor would also take a 66.66% haircut and be secondary creditors to the Noteholders.

Nouvobanq provided Air Seychelles with a loan of USD 16.5m to be repaid over 6 years. On the 10th May 2022, Air Seychelles made payment of the full USD 28,159,399.23 owed to the bondholders using the USD 16.5m from Nouvobanq and USD 11.7m from Air Seychelles’ own cash reserves. Consequently, the Bondholders withdrew the winding-up petition against Air Seychelles on the 11th May, 2022.

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