Etihad sells stake in Air Seychelles

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on May 1, 2021
Etihad spokesperson said it is a time of opportunity for both Air Seychelles and the country, as tourism starts to rebuild following the reopening of its borders. — File photo

The UAE carrier will no longer be a shareholder in the Seychelles Government-owned airline

Etihad Aviation Group has sold its 40 per cent holding in Air Seychelles to the Government of Seychelles, and will no longer be a shareholder in the Seychelles Government-owned airline, the UAE national carrier confirmed to Khaleej Times on Saturday.

“Etihad’s management contract has also been terminated, however Remco Althuis and Michael Berlouis will remain on as CEO and CFO respectively until 30 June, to assist with the transition,” an Etihad spokesperson said.

The Secretary of State in Seychelles Ministry of Finance, Patrick Payet, announced on Thursday that Seychelles received a 79 per cent discount on the total liability that Air Seychelles owes Etihad, according to Seychelles News Agency.

Air Seychelles, which operates a fleet of just two Airbus A320neos, and five DHC-6-400 Twin Otters, owed $72.3 million to Etihad. With the 79 per cent write-down, Seychelles will now pay $11.34 million. A total of $71.5 million is still owed to bondholders, the official disclosed.

"We are going to pay only 21 per cent and this liability has been taken over by the government. Repayment will start from 2022 onwards. The second negotiation that we have is with the bondholders, where we are proposing to them to pay only $20 million," said Payet.

Its a time of opportunity

Etihad spokesperson said it is a time of opportunity for both Air Seychelles and the country, as tourism starts to rebuild following the reopening of its borders. “Etihad remains committed to Air Seychelles as a commercial codeshare partner.”

“Seychelles is an important destination on Etihad’s global network, with bookings steadily increasing following its reopening to tourism. We look forward to continuing to serve the people of the Seychelles as a facilitator for international trade and tourism,” the UAE carrier said in a statement.

Seychelles’s Payet said his country is still holding discussions with the Trade Development Bank - a bank in Africa - for a loan to be taken by the government to pay the bondholders and Etihad. Once negotiations are completed with the bondholders, details are expected to be relayed to the media.

"All of these liabilities will be in the government's books so Air Seychelles will have a clean sheet from the liability that they have," said Payet.

Long partnership ends

Etihad Airways entered a partnership with Air Seychelles in 2012, when it bought a 40 per cent share in the national airline. This was when Etihad was trying to build a fourth major alliance, known as Etihad Airways Partners.

The remaining 60 per cent belonged to the government of Seychelles – a 115-islands in the western Indian Ocean.

Under the original deal, the funds provided by bondholders would be split between the UAE carrier and partner airlines. Each company assumed the responsibility to pay off its debt before the bond reached its due date in 2021.

Air Seychelles new boad sets up

A new board has been set up for Air Seychelles to be headed by Nane Nanty as the chairperson with Alan Mason as its co-chairman.

The director of policy and strategy at the transport ministry, Magalie Essack, said that "in this phase of negotiations with Etihad Airways, there is a transitional agreement that has been signed in regards to the chief executive and the chief financial officer."

"It states that the mandate of the CEO and the CFO employed by Etihad Airways will end on June 30, 2021. With The appointment of the new board, members are expected to undertake an exercise to relook at how a new CEO and CFO will be appointed," said Essack.

The board will also be relooking at the operations of the airline as a whole and make recommendations to the government.

— issacjohn@khaleejtimes.com


Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

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