Smartwings has prepared a reorganization plan for indebted Czech Airlines. The insolvency court approved a report on the plan yesterday, but its acceptance will be decided by creditors. It follows from the insolvency register. 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.
Smartwings has not yet announced a reorganization plan. According to the law, he must first submit a report on it to the court. The report shall include a reorganization plan or a summary thereof and an assessment of its impact on creditors. At the same time, the report should contain sufficient information to enable the creditor to decide whether to accept the reorganization plan. Above all, it should be a question of what kind of performance the company offers. Creditors must receive the report in advance. It is not yet clear when the lenders will decide to accept the plan.
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.
The creditors of the indebted CSA have so far registered claims in the insolvency proceedings with the airline for approximately CZK 20 billion. The role of insolvency administrator is performed by the Karviná company Inskol, represented by Michael Šefčík. The court also commissioned Grant Thornton to draw up an expert report assessing CSA’s assets, which would be distributed to creditors in the event of the company’s bankruptcy. According to the report, the substance is CZK 172 million, while according to this report, the airline ended up with a loss of more than CZK 2.64 billion last year.
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 employment 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 was reduced to two aircraft, however, the operation continues.
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: CTK
