Creditors of indebted company Czech Airlines (CSA) accepted the firm’s reorganisation plan at their meeting today, and while the plan is yet to be approved by the court in the coming days or weeks, this should be merely a formal step given the agreement of all five groups of creditors.
New company Prague City Air, belonging to Smartwings owners Jiri Simane and the Vik family, should thus become a new investor in CSA.
According to the reorganisation plan, prepared by Smartwings, the investors will provide the airline with a loan of CZK 125 million to pay creditors.
CSA has been insolvent since last March and the court subsequently allowed its reorganisation.
The plan’s approval by the creditors is an important step to maintaining CSA’s airline licence, representatives of parent company Smartwings said.
“Today’s decision is good news for all of CSA’s creditors as well as the company itself, which will be able to build on its almost 100 years of tradition,” said Smartwings spokeswoman Vladimira Dufkova.
Stakes of current shareholders should cease to exist, in line with the plan. Almost 98 percent of CSA’s shares are currently owned by Smartwings and 2.2 percent by insurer Ceska pojistovna.
Prague City Air should also provide CSA with an operating loan of Kc15m, which will be collateralised with the only aircraft owned by the airline, Airbus A319.
CSA’s unsecured assets were previously valued at Kc253m. According to the plan, two creditors should obtain more than half of their receivables, with Quiver Beta claiming Kc55m and Lufthansa Technik Kc3m. Other creditors will receive 4.6 percent of their receivables. Company Airbus, which is one of CSA’s largest creditors with Kc17.3bn for untaken aircraft, should subsequently withdraw its claim.
CSA had to cancel a lot of flights because of the coronavirus pandemic and dismissed around 300 employees in 2020. In February 2021, the carrier announced its intention to lay off up to all of its 430 employees as a reorganisation step. The company reduced its fleet due to the crisis but its operations continue.
Source: CSA and CTK
