Owners of Smartwings are to become a new CSA investor

by   CIJ News iDesk III
2022-02-11   13:09
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The new investor in Czech Airlines (CSA) is to be the Prague City Air company, founded at the end of January, owned by Smartwings owners Jiří Šimáně and the Vikových family. According to the reorganization plan, the company will provide the airline with a settlement loan of CZK 125 million, from which creditors will be paid.

CSA has been in bankruptcy since last March, and in June the court approved their reorganization, which is in charge of the parent company Smartwings.

Prague City Air should also provide CSA with an operating loan of CZK 15 million. The Airbus A319, the only aircraft owned by the airline, will be stopped against the loan. The shares of the existing shareholders are to disappear completely. The plan has yet to be approved by creditors.

Last year, Smartwings asked the court to extend the deadline for the reorganization plan for CSA until February this year. The company needed more time to negotiate with Airbus, which is one of the largest creditors indebted to CSA. Its receivable is CZK 17.3 billion for uncollected aircraft.

The value of CSA's unsecured assets is set at CZK 253 million. According to the plan, more than half of the claims of the two secured creditors should be satisfied. Quiver Beta claims CZK 55 million, Lufthansa Technik three million. Other creditors will receive 4.6 percent of their receivables. Airbus should then also withdraw its claim.

The server warned that CSA should be able to operate two A319 aircraft and a leased A320. Next year, five Smartwings aircraft are to help the airlines, and from the second half of the year the company will gradually lease four new Airbus A220s.

CSA was hit by the effects of the coronavirus epidemic, and the carrier had to cancel a large number of connections. He laid off around 300 workers the year before last. Last February, the company announced to the Labor Office its intention to lay off all 430 employees. In this context, CSA pointed out that this is one of the steps in the planned reorganization, and the intention does not have to mean the release of everyone. Due to the crisis, the airline's fleet has shrunk, but operations continue.

The parent company Smartwings also found itself in economic trouble due to the coronavirus crisis and flight disruptions. The company draws a loan from four banks for two billion crowns. The total financing of the carrier will exceed seven billion crowns, additional money should be provided by Czech shareholders, support for leasing companies and restructuring.

Source: Zdopravy.cz and CTK