The government of the Seychelles has recovered full ownership of Air Seychelles following an agreement with Etihad Airways.
The United Arab Emirates flag-carrier had taken a stake in the Indian Ocean airline in 2012 as part of a wider equity investment strategy.
Now, after months of negotiations, the Seychelles government will pay just US$1 to recover the 40 per cent share.
The Middle East-based airline has been looking to divest its foreign airline investments in the wake of the Covid-19 pandemic.
As a result of the deal, Air Seychelles will now be fully state-owned and plans to restructure its board in June.
Incumbent executives at Air Seychelles, including chief executive Remco Althuis, and Michael Berlouis, chief financial officer, will remain in position until then.
The new board will be led by Nane Nanty as chairperson, with Alan Mason as co-chairman.
Together with relinquishing its stake, Etihad has agreed to cut the debt it is owed by Air Seychelles by 79 per cent.
Air Seychelles owes Etihad debts exceeding $72 million, which both parties have been negotiating to restructure.
After the cut, Air Seychelles will pay $11 million rather than the full $72 million.
The Etihad stake in the Indian Ocean airline was part of a wider plan to take the Abu Dhabi flag-carrier global.
However, years of losses saw architect of the plan, chief executive James Hogan, leave and the gradual dissolution of the strategy.
The network of airline investments led to $7 billion in losses over the five years ending in 2020.
Alitalia, however, struggles on in Italy, while Etihad reduced its stake in Air Serbia to 18 per cent from 49 per cent in December.
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Air Seychelles has been implementing a transformation plan since 2018 after seeing substantial losses, mainly from flying long-haul routes, according to chief executive Althuis.
The airline has since abandoned intercontinental markets such as Paris, replaced Airbus A330 planes with smaller A320 jets and focused on its regional network.
Find out more about Althuis’ plans for the future in a Breaking Travel News interview here.