Air Seychelles out of insolvency process |15 November 2022
The press conference: (l to r) Mr Pool, Minister Derjacques, Ms Laporte and Mr Benoiton (Photo: Louis Toussaint)
• Exits Company reorganisation (Administration)
Air Seychelles is exiting a thirteen-month Company reorganisation (Administration) it entered into in October 2021, after it has successfully been able to pay off its debts and reached financial stability.
The Minister for Transport, Antony Derjacques, made the announcement at a press conference yesterday afternoon at his headquarters at the Botanical House, in the presence of the chairperson of the Board, Veronique Laporte, Administrator Bernard Pool, and the acting chief executive of Air Seychelles, Sandy Benoiton.
Speaking to the local media, Minister Derjacques said the company is now out of the insolvency process or liquidation, “after Seychelles’ Supreme Court approved its rescue plan on November 7, 2022 and the board of Air Seychelles signed a resolution on November 8, 2022 to execute the rescue plan”.
Minister Derjacques explained the airline’s creditors, namely AS SPV Limited, Nouvobanq and the Seychelles’ government, unanimously approved the rescue plan at an Air Seychelles creditors meeting on October 25, 2022, paving the way for its removal from the Company Reorganisation (Administration), which was being overseen by two administrators – Bernard Pool and Suketu Patel.
He said this was through the “collective effort of the ministry, administrators, the Air Seychelles’ board, management, staff members and legal counsel and thanked all of them for their hard work and commitment”.
It should be noted that in 2015 and 2016, Air Seychelles entered into a facility agreement with EA Partners I B.V and EA Partners II B.V for the sums of US $21,539,000 and US $50,000,000 respectively which resulted in a total financing of US $71.5m.
In April 2021, the government of Seychelles agreed to purchase the debt owed by Air Seychelles to Etihad of US $70,233,011 for a price of US $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.
However, due to the financial constraints imposed by the Covid-19 pandemic, the company had defaulted on the principal debt obligation to the bondholders, consequently leading to a winding-up petition by the Bondholders in August 2021 by the bondholders.
In October 2021, the board resolved that the company enters into Company Reorganisation with the appointment of Bernard Pool and Suketu Patel as administrators and a rescue plan was presented to the creditors by the administrators and involved a haircut of 66.66% of amounts due to the bondholders, in December last year.
Under the 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 US $16.5m to be repaid over 6 years.
In May 2022, Air Seychelles made payment of the full US $28,159,399.23 owed to the bondholders using the US $16.5m from Nouvobanq and US $11.7m from Air Seychelles’ own cash reserves.
Consequently, the bondholders withdrew the winding-up petition against the company in May, this year.
Speaking at yesterday’s press conference, the chairperson of Air Seychelle, Ms Laporte, said although the company went through a difficult transition full of uncertainties during the past year, she was glad that they could stand tall and proud today.
She said the board of Air Seychelles was committed to the rescue plan.
“I stand proud for our directors on the board, our acting CEO and acting CFO, who worked tirelessly during the past year with our administrators and the ministry so that we can stand tall and proud today, and of course not forgetting the staff of Air Seychelles,” said Ms Laporte.
Mr Benoiton said 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 ring-fencing through the acquisition and transfer of these assets to the government of Seychelles to ensure continuity of the critical gateway into Seychelles.
Mr Benoiton explained that Air Seychelles will continue to perform the ground handling operations exactly as before, except it will lease rather than own the ground handling equipment.
“Under the agreement the Seychelles Civil Aviation Authority will set up a separate company that will hold the ground handling equipment. However the services will be done by Air Seychelles, so the company will continue to operate as is the case presently, so staff should not worry as there will be no movement of staff to any new company or redundancy of staff,” explained Mr Benoiton.
As one of the administrators, Mr Pool said he was glad they finally reached a satisfactory rescue plan for parties involved.
Air Seychelles has an outstanding debt of US $13 million to its shareholder, the Seychelles government.
Patsy Canaya/ Press release from the Ministry of Transport