Cabo Verde Airlines (CVA) relaunch requires creditors support
The CEO of Cabo Verde Airlines (CVA) does not see a way out of the crisis for the company without the involvement of its various creditors. Run since March 2019 by Icelandic investors, the carrier, financially weakened by Covid-19, has not performed any commercial flights for nearly a year.
n an interview given to the Portuguese press agency "Lusa" and published on Wednesday 10 February, Erlendur Svavarsson indicated that "so far, every effort has been made to avoid the bankruptcy of CVA". But for him, “the effort of all stakeholders, including suppliers and financiers, will be necessary to successfully relaunch the airline.”
In March 2019, the State of Cape Verde sold 51% of the company. TACV-era state-owned company for 1.3 million euros to Lofleidir Cabo Verde, a company 70% owned by the carrier Loftleidir Icelandic EHF and 30% by Icelandic entrepreneurs. The remaining share capital is divided between the State (39%), the diaspora (7.65%) and the workers (2.35%).
Since then, negotiations concerning the refinancing of the company and the settlement of its debt trample. An agreement has still not been reached between the government and management. Erlendur Svavarsson, who took over the company in February 2020, seems to find an explanation for this. “The state of Cape Verde has lost significant revenues due to the reduction in tourism following the pandemic. This loss of revenue may reduce the government's ability to help the airline,”he explains.“
I am confident that shareholders will come to an agreement, but I am also confident that other interested parties, such as commercial creditors, will have to be a significant part of the solution,”said Erlendur Svavarsson, without giving details of the company's debt. CVA, which operates a homogeneous fleet of 3 Boeing 757-200s, suspended scheduled flights on March 18, 2020 following the closure of the borders, decided by the government. The restriction has since been lifted on October 12, 2020. But CVA has still not resumed flights. Asked about the estimates of the financial needs to relaunch the company, the chairman of the board refused to go into details: “The shareholders are evaluating several scenarios, each with a different cost. It would not be prudent of me to divulge figures at this time”.
