Creditors consider action against Air Seychelles in Etihad debt saga

Holders of around $70m in troubled bonds issued on behalf of Air Seychelles are considering options including enforcement against the African carrier, according to sources and documents. The action under consideration is the latest twist in broader creditor efforts to recover $1.2 billion in funds owed by Abu Dhabi’s Etihad Airways and related airlines including Air Seychelles. Etihad is state-owned Air Seychelles’ second-biggest shareholder. Air Seychelles, which has been hit particularly hard by the coronavirus crisis, was part of a consortium comprising Etihad and related airlines that borrowed the $1.2b through a special purpose vehicle in 2015 and 2016. Air Seychelles and a steering committee of debtholders have engaged in restructuring talks since last July after the airline said it was struggling to honour its portion of the debt, worth around $70m, due to the COVID-19 outbreak. Creditors are now considering options including enforcement action against the carrier, sources familiar with the matter said, the latest turn in a debt saga resulting from the unravelling of Etihad’s strategy to embark on global partnerships with airlines such as Air Berlin, Jet Airways, and Alitalia, which have since gone bankrupt.<br/>