Air Seychelles enters administration

October 8th 2021

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Air Seychelles has blamed Etihad Airways and the COVID pandemic for the appointment of administrators to restructure its operations. Read More » The airline, which will continue to operate, said it had faced significant challenges in the last 18 months due to the pandemic’s impact on international travel and tourism. But it mainly blamed its financial difficulties on a significant debt incurred during the stewardship of former shareholder Etihad. “This debt comprises amounts owed directly to Etihad and also loans of almost $72 million funded by the capital markets that are now controlled by bondholders of EA Partners,’’ the company said in a statement. The Seychelles government, which owned 60% of the airline in conjunction with Etihad, bought out the Gulf carrier’s 40% share and has negotiated a discount on the debt as part of the first step in a restructuring. The company said the decision to reorganise under insolvency legislation was made after talks between the nation’s government, Air Seychelles and the bondholders of EA partners could not agree terms on repayments that the government could afford. “The EA Partners bondholders have, in the meantime, presented a petition for the winding up of Air Seychelles,’’ the statement said. “This petition is designed to exert pressure so the bondholders can maximise their recoveries on their debt. However, it is counterproductive. If the winding up the bondholders seeks takes place, the creditors of Air Seychelles (including the bondholders) will receive repayment of only a very small fraction of their debts.” Bernard Pool, assisted by Suketu Patel, will undertake the administration, which is expected to take three to six months.