Air Seychelles here to stay Gets 79% discount on total debt and new board |30 April 2021
The press conference yesterday: (l to r) Mr Althuis, PS Renaud, SS Payet and Mrs Essack (Photo: Joena Meme)
Air Seychelles is here to stay under a new board chaired by Nane Nanty and this follows the national airline’s 79% discount on its total debt following the break-up of the partnership it had with Etihad Airways.
Secretary of state for finance Patrick Payet gave details of the break-up in a press conference yesterday afternoon at the head office of the Ministry of Transport, Botanical House, Mont Fleuri. Also present were the principal secretary for civil aviation, ports and marine, Alan Renaud; chief executive of Air Seychelles Remco Althuis, and the director for policy and strategy in the Ministry of Transport Magalie Essack.
Mr Payet explained that the government through negotiations with Etihad Airways, has received a discount of 79% on Air Seychelles’ total debt liabilities compared to 20% as reported in the media on Wednesday.
He also clarified the government’s position following Air Seychelles’ partnership break-up with Etihad Airways for which government acquired the 40% share owned by Etihad Airways (which also include the domestic and ground handling services) and on its rescheduled debt. He said results of the negotiations signal that Air Seychelles is here to stay.
Secretary of state (SS) Payet stated that the debt owned by our national carrier to Etihad Airways was a total liability of US $73 million, adding that with the 79% reduction on the debt, government will have only US $11 million (21%) to pay in total starting in 2022 onward as negotiated by President Wavel Ramkalawan on one of his visits to the United Arab Emirates (UAE).
On the other hand, he said Air Seychelles still owes US $71.5 million to bond holders, made up of mostly individuals in the UAE. He noted that through negotiations to be held with them shortly, government will propose US $20 million as the final sum that it can afford to repay the loan taken by Air Seychelles in 2015.
SS Payet explained that the bond holders refused the government’s proposal for a higher reduction in the debt rescheduling in the first negotiation and he hopes they will accept the government’s second proposal.
Although Etihad Airways was in full control of the management of Air Seychelles, SS Payet said the national carrier bears full responsibility for loans from the bond holders signed by the board members on Air Seychelles’ behalf.
He stated that the government is negotiating with the Trade Development Bank (TDB), in Africa, formerly the PTA Bank, for a loan to pay off the shares acquired from Etihad Airways as well as the bond holders if they agree on the US $20 million as final payment.
SS Payet claimed that since government has regained 100% control of the management of Air Seychelles, it will be better represented in negotiations for a loan write-off with the bond holders.
He also claimed that with the loan having been taken over and to be paid by government, it will allow the airline with a clear balance sheet to restructure its operations and become viable.
He also added that government has guaranteed the salaries of Air Seychelles’ employees in the national budget for this year only and the company has to find ways to sustain itself as it will not be assisted further.
The public will be kept informed on the negotiations taking place with the participation of ministers and technicians.
To note, Etihad Airways had written off US $34 million in invoices from Air Seychelles in 2017 and at the start of the partnership agreement in 2012, injected US $20 million, among other benefits it had contributed.
For his part, PS Renaud, who also forms part of the Seychelles negotiation team, said the bonds shareholders are unknown to them as they are in negotiation with only a small group of people, mostly lawyers based in England who are representing the shareholders. He claimed no Seychellois are bond holders.
PS Renaud stated that the sale and purchase agreement for the transfer of the 40% shares owned by Etihad Airways to government, on behalf of Air Seychelles, was signed by the Minister for Transport, Antony Derjacques; Minister for Finance, Economic Planning and Trade, Naadir Hassan; and the chief executive of Air Seychelles, Remco Althuis.
At the start of the press conference, Mrs Essack announced the composition of the new board of Air Seychelles effective as of yesterday (April 29, 2021) for a three-year term. They are Nane Nanty (chairperson), Alan Mason (co-chairperson), Irene Croisée, Veronique Laporte, Egbert Laurence, Daphnee Hoareau and Ralph Saminaden (members).
Mrs Essack said that apart from guiding the restructuring process taking place and turning around the company to make it viable, the new board will seek for the appointment of a CEO and chief finance officer whose contracts expire in June 2021.
Speaking on behalf of Air Seychelles, Mr Althuis said although there is still a hurdle to take with regards to negotiation with the bond holders, they are very grateful for the support given by the shareholder (Etihad Airways) given the fact that the national carrier cannot afford to carry the debt level it had.
He noted that the 650 dedicated Air Seychelles employees want to do nothing more than to continue fly and ground handling as many people as possible.
Air Seychelles and Etihad Airways entered in partnership in 2012. As part of the strategic partnership agreement, the Abu Dhabi-based airline acquired a 40 percent stake in Air Seychelles at a valued prize of US $20 million.
Patrick Joubert