Cabinet Business- 11 November 2019
11 November 2019
President Danny Faure chaired an extraordinary meeting of the Cabinet on Saturday 9th November, at which the case of Air Seychelles was considered.
Cabinet gave approval for the Government of Seychelles, Air Seychelles (HM), and Seychelles Civil Aviation Authority (SCAA) to sign four agreements relating to the Air Seychelles Phase II Transaction Documents, which are part of its 5 year transformation plan initiated in December 2017. The documents are:
(a) Subscription and Waiver Agreement (“Subscription Agreement”) (b) Put Option Agreement (“Put Option Agreement”)
(c) Exclusivity Agreement (“Deed of Agreement Relating to Exclusive Rights to Provide Ground Handling Services”)
(d) Ground Handling Services Permit (“Permit”).
Cabinet were informed that the Etihad Aviation Group Investment Holding Company (EAGIHC) had accepted a bank guarantee instead of the call option on the ground handling component of the Air Seychelles operations. The Bank guarantee will be supported by a sovereign guarantee. The Barclays Bank and the Trade Development Bank have agreed to guarantee Air Seychelles for US$30M.
The details of the four documents were presented to Cabinet and members were informed that the Exclusivity Agreement and the Ground Handling Services Permit were needed to support Air Seychelles’ revenue generation in order to secure future revenue streams to support its operations. The Ground Handling exclusivity agreement will recognise Air Seychelles as the sole ground handler for Mahe and Praslin Airports. The Ground handling permit is required to regularise its operation to ensure standards are met. As part of the agreement government will have to enact new Ground Handling Regulations, which will need to be in force by April 2020.
Air Seychelles will provide further details of the approval in its press conference on Thursday 14th November 2019.