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Etihad divests full stake in Air Seychelles

May 2, 2021

Etihad's management contract has ended but the CEO and CFO will serve until June 30 to assist with the carrier's transition

Etihad Airways said it sold its 40 per cent stake in Air Seychelles to the government of the Indian Ocean island, as the Abu Dhabi airline moves away from a strategy of expansion through investments in other airlines.

Etihad's management contract has also ended, but chief executive of Air Seychelles Remco Althuis and chief financial officer Michael Berlouis will remain on until June 30 to assist with the carrier's transition, Etihad said in a statement.

'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,' an Etihad spokeswoman said, without providing the value of the deal. Etihad acquired the 40 per cent stake in Air Seychelles in 2012.

The move is in line with Etihad's five-year restructuring plan, which includes stepping back from the carrier's global equity alliance strategy and positions the company as a mid-sized boutique airline operating smaller, widebody aircraft with the Boeing 787 Dreamliner as the 'backbone' of the fleet.

For Seychelles, famous for its turquoise beaches and diving spots, the deal to take full ownership of its flag carrier is an opportunity to focus on profitable routes as air travel shows signs of recovery from the Covid-19 pandemic that decimated demand.

'This is a time of opportunity for both Air Seychelles and the country, as tourism starts to rebuild following the reopening of its borders,' Etihad said.

The airline remains committed to Air Seychelles as a commercial codeshare partner, it said.

'Seychelles is an important destination on Etihad’s global network, with bookings steadily increasing following its reopening to tourism,' Etihad said.

Seychelles received a 79 per cent discount on the total debt of $72.3 million that Air Seychelles owes Etihad, said its Secretary of State in the Ministry of Finance, Patrick Payet, according to the Sechelles News Agency. Repayment of the remaining debt will start from 2022 onwards.

The Seychelles government also offered to pay $20m of the $71.5m still owed to bondholders, Mr Payet said.

Seychelles is in discussions with the Trade Development Bank for a government loan to pay the bondholders and Etihad, he added.

'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,' Mr Payet said.

A new board has been appointed at Air Seychelles that will seek to appoint a new chief executive and chief financial officer, the news agency reported, citing government officials.

The new board will also be reviewing the airline's operations and making recommendations to the government, it said.


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