Etihad Airways is in the process of selling its 40% stake in Air Seychelles for $ 1, and the airline will cancel over $ 60 million in debt in the process. Ahem, Etihad, OMAAT is looking for new investors. Please call me as soon as possible. ?
Etihad sells Air Seychelles’ stake to the government
Etihad acquired a 40% stake in Air Seychelles in 2012 as part of its then global investment strategy. At this point, Etihad was essentially trying to take over the aviation world and create a fourth major alliance known as Etihad Airways Partners.
There have been rumors for quite some time that Etihad is planning to sell its stake in money-losing Air Seychelles, and that’s now official.
It was announced that the Seychelles government and Abu Dhabi-based Etihad have reached an agreement whereby the government will once again take full control of the national airline. With this deal:
- The Seychelles government will once again own 100% of the airline
- Air Seychelles owed Etihad $ 72.3 million but that will be written off 79% so Etihad will only receive $ 11.34 million and repayment will begin in 2022
- Bondholders are still owed $ 71.5 million, and the Seychelles government is proposing to pay only $ 20 million on that debt
- The Seychelles government is currently in talks with the Trade Development Bank about a loan that the government will take out to pay bondholders and Etihad
- All of these liabilities will be assumed by the government, wiping out Air Seychelles’ liabilities
The amount of debt we are talking about at Air Seychelles is absolutely wild considering how small the airline is – Air Seychelles operates a fleet of just two Airbus A320neos and five DHC-6-400 Twin Otters.
The backbone of the Air Seychelles fleet
Etihad is a disastrous investment strategy
With the sale of Etihad’s stake in Air Seychelles, the airline’s nightmare attempt to invest in other airlines is more or less over. Do you remember when Etihad Airways Partners was a thing?
Etihad Airways partners of the past
Well, how does it look now?
Do you remember Jet Airways?
Currently, the Etihad airline’s only remaining investment is in Air Serbia, although that stake has been reduced from 49% to 18%, and Etihad is reportedly intending to sell its stake in the airline as well.
I mean, I have to give Etihad credit – I don’t think I’ve ever seen an airline set fire to such easy money as Etihad under James Hogan’s leadership. My dog Winston could have invested that money better than Etihad. I think investing in Global Ghana Airlines and Baltia would have given better returns.
I am surprised that Etihad did not buy a stake in Goldstar Air
Can you believe people got money to implement this strategy?
Now, while I’m (rightly I believe) fumbling around on Etihad, here’s what I want to remark:
- This has all been done under the supervision of the previous management team, and the current management team is doing an excellent job reducing costs and being more realistic (for better or for worse).
- I imagine the old strategy was also mostly about soft political power, and I suspect that Hogan was backed by the Abu Dhabi government to set money on fire until they changed their minds and decided to do this No longer funding vanity project
Etihad is now going the other extreme of withdrawing the A380
Bottom line
Etihad is selling its stake in Air Seychelles for $ 1, forgiving over $ 60 million in debt. At this point, Etihad’s only remaining airline investment is in Air Serbia, where the airline owns an 18% stake, but they are also trying to get rid of that.
It’s amazing how much chaos the current Etihad management team has to clean up …
What do you think of Etihad’s surrender of its stake in Air Seychelles?
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