Air Seychelles: the renationalization process is taking shape
Air Seychelles will be renationalized. Seychellois President Wavel Ramkalawan agreed with Etihad Airways during a three-day visit (February 19-22) to the United Arab Emirates. According to the statement released by the Seychelles presidency, negotiations are underway to buy back shares (40%) in EAG Investment Holding Company Limited (EAGIHC), a subsidiary of Etihad Aviation Group.
Once this is done, the Seychellois parastatal will revert to being 100% Seychellois owned. But in the meantime, the president was able to secure a reprieve, allowing Air Seychelles to make no debt repayments, to Etihad until the end of the year. The UAE carrier took a stake in Air Seychelles on January 26, 2012, for a budget of $ 20 million. The Abu Dhabi-based company was also due to provide a $ 25 million shareholder loan to its new subsidiary. This should enable it to meet working capital requirements and support the development of its network.
Separately, the company is dragging $ 72 million in debt to its creditors, including Etihad Airways Partners II, which last year rejected its proposal to reduce the value of its loan to $ 15 million. This is its share to pay of a credit of $ 1.2 billion, raised by its shareholder - Etihad Airways - on the international markets between September 2015 and May 2016. But the scheduled repayments have become particularly expensive due to the health crisis. According to the presidency of the country, new negotiations are underway on the method of payment of the said debt. Last month, the Head of State indicated that Air Seychelles is accumulating losses of 800 million Seychellois rupees (37.8 million USD) and is now seeking 109 million Seychellois rupees (5.15 million USD) in budget support to finance staff salaries.
With a deficit on international routes, Air Seychelles could definitively refocus its activities on the domestic market.
