The airline Air Seychelles had to announce that it has filed for bankruptcy. The company is to be fundamentally restructured within the framework of local laws. An administrator has meanwhile been appointed.

The airline and the Ministry of Transport raise serious allegations against Etihad Airways in a joint statement. The golf carrier, which recently sold its 40 percent stake back to the state, is accused of having built up a significant mountain of debt under its joint ownership. Air Seychelles flown in losses all the time.

“Air Seychelles has faced significant challenges over the past 18 months due to the COVID pandemic and its impact on international travel and tourism. However, Air Seychelles' financial troubles are mainly due to significant debt incurred while Etihad Airways ran the airline, which previously held a 40 percent interest in the company. These debts include amounts owed directly to Etihad and nearly $ 72 million in loans that were financed by the capital market and now controlled by EA Partners bondholders, ”the media statement read.

Currently the carrier is wholly owned by the Seychelles government, but no state aid is envisaged. This is also due to the fact that the IMF has recently submitted to cap agreements. The only option that holds out the prospect of keeping the company is to reorganize as part of insolvency proceedings. In this context, there is also a warning that creditors may default.

Bernard Pool and Suketu Patel were appointed Air Seychells' trustees. The management and the board of directors are to remain in office for the time being under the supervision of the aforementioned lawyers. A comprehensive restructuring plan must be submitted to the competent court within three to six months. For the time being, business and thus also flight operations are to continue.

Regarding the bankruptcy filing, it was further stated: "Therefore, the only option is to undertake a company restructuring, which is a procedure under the Bankruptcy Act that is intended to enable the company to continue its business operations while it decides whether a rescue plan should be presented to its creditors, to provide a long-term solution to the company's financial difficulties. It is in contrast to liquidation, which appoints a liquidator to take control of the company's assets and sell them to pay off all creditors ”.