Air Seychelles exited Administration on November 8, 2022, after paying off its debts and reached financial stability, according to the Ministry of Transport. The restructuring was the collective effort of the Ministry, Administrators, the Air Seychelles’ board, management, staff members, and legal counsel.
At the start of the Administration, Air Seychelles net assets position was negative $85 million. After the execution of the rescue plan, this improved to a positive net asset position in excess of $12 million, marking an improvement of over $96 million.
Transport Minister Antony Derjacques said: “Air Seychelles’ rescue plan was presented to the court, and accepted on November 7, 2022. A day later, the board signed a resolution that it will carry out this plan.”
Acting Chief Executive Officer Sandy Benoiton said: “We are extremely pleased that the Administrators have accepted the management’s business plan and have been able to settle past debts amicably. Going forward, Air Seychelles has been able to chart a path to profitability and sustainably without direct funding from the Government of Seychelles.”
Air Seychelles had entered into a facility agreement with EA Partners I B.V. for $21 million in 2015 and immediately the next year, Air Seychelles entered into another facility agreement with EA Partners II B.V. for $50 million This resulted in a total financing of $71.5 million.
In April 2021, the Government of Seychelles agreed to purchase the debt owed by Air Seychelles to Etihad of $70 million for a price of $13,063,185 at a discount of about 81% and simultaneously purchase Etihad Airways’ 40% stake in Air Seychelles for $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 in August 2022 by the Bondholders. In October 2021, the board resolved that the company should enter the Company Reorganization with the appointment of Bernard Pool and Suketu Patel as Administrators.
In December 2021 a rescue plan was presented to the creditors by the Administrators that involved 66.66% of the amounts due to the bondholders. The government of Seychelles as the creditor would also take a 66.66% cut and be a secondary creditor to the Noteholders.
Nouvobanq (which was founded in 1991, as a joint venture between the Government of Seychelles and Standard Chartered Bank) provided Air Seychelles with a loan of $16.5 million to be repaid over six years. On May 10, 2022, Air Seychelles made payment of the full $28 million owed to the bondholders using the $16.5 million from Nouvobanq and $11.7 million from Air Seychelles’ own cash reserves. Consequently, the bondholders withdrew the winding-up petition against Air Seychelles in May 2022.
“When looking at the individual business units, ground and cargo operations have recovered to approximately 80% of pre-pandemic levels, and domestic operations are increasing month-on-month as tourists return to Seychelles in record numbers. For our international flying business, we have transformed the business from solely commel flights to a mix of commercial flights, charter operations, and ACMI, which has worked well to ensure a more balanced mix of risk and profitability. While we have resumed flights to all of our international ports, we will continue to seek out new opportunities as market dynamics develop,” added Benoiton.