Air Seychelles out of provisional administration after 13 months
Air Seychelles was renationalised in April 2021 after a tumultuous 9-year marriage with its then partner, Etihad Airways (40%). This divorce left the Seychelles carrier with a very large debt to its creditors. It was to protect itself from legal proceedings that the State placed it under provisional administration in October 2021.
Air Seychelles is back in full control of its activities. The Seychelles national carrier has been officially removed from administration and the board of directors, led by Véronique Laporte, has been reinstated. The announcement was made by Antony Derjacques, the Minister of Transport, Civil Aviation and Marine, during an exchange with media men and women on 15 November, reports the official Seychelles News Agency. "Today is a very happy occasion as we announce that Air Seychelles is out of court administration after 13 months," the Minister said.
Air Seychelles had been placed under provisional administration in October 2021 under the national bankruptcy protection law. At that time, the company had accumulated a total debt of more than 153 million dollars. The Seychelles government had put the burden of this unsustainable debt on the former administration led by Etihad Airways - which held a 40% stake in the company until April 2021, when it was ousted after 9 years of collaboration.
In the wake of the restructuring, two directors, Suketu Patel and Bernard Pool, were appointed to consider how best to deal with its debts.
Earlier in February this year, after months of negotiations between the Seychelles government and the plaintiff, the company obtained a write-off of more than 60% of its debt owed to EA Partners, an SPV (Special Purpose Vehicle) backed by Etihad Airways. As a result, Air Seychelles was now owed only USD 28.3 million as opposed to the USD 76 million initially assessed.
This amount represented the share to be paid by the Seychelles national airline on two separate loans of 700 million and 500 million dollars, taken out in September 2015 and May 2016 by Etihad Airways (its former shareholder with 40%). The total funds had been split between the UAE carrier, Etihad Airport Services, Air Berlin, Air Serbia, Air Seychelles, Jet Airways and Alitalia. Under the original agreement, each airline was to pay its own debt, but three of them have since gone bankrupt.
In May, the government announced the full discharge of the $28.3 million owed to EA Partners. This decision led to the withdrawal of the winding-up petition filed against Air Seychelles on 19 August 2021. The Seychelles government loaned Air Seychelles $13 million to pay off this debt while the rest of the funds raised came from the company's own coffers. According to Minister Derjacques, Air Seychelles has a grace period of six years to repay this loan, which could even be cancelled by then if all goes well.
Under the new rescue plan approved by the court on 7 November, it has been agreed that the Seychelles Civil Aviation Authority (SCAA) will set up a new company to hold all the assets of the ground handling operations, for which Air Seychelles will sign a management contract. This will ensure, according to the Minister of Transport, that in case of future difficulties, the impact on ground handling will be minimal. The Board of Directors is still expected to consider the fate of General Manager Sandy Benoiton and Chief Financial Officer Tyrian Gendron, who have been acting in their positions since April 2021.
Established in 1978, Air Seychelles currently operates a fleet of seven aircraft including two additional A320neo aircraft. The airline offers international and domestic flights and provides ground handling and cargo services to more than 12 airlines operating at the Seychelles International Airport in Pointe Larue.
