High Hopes: Helping Trans Maldivian Airways Return to the Skies
September 08, 2023DownloadsDownload Case Study
Trans Maldivian Airways ("TMA"), the world's largest seaplane operator with a fleet of over 56 seaplanes transporting tourists from the Velena International Airport in Maél to the Maldivian atolls, was suddenly grounded in early 2020 due to the COVID-19 pandemic- induced breakdown in travel.
Following the closure of the Maldivian borders and the suspension of operations, the company found itself in a difficult position with no income and was therefore unable to service its interest and principal obligations on its ~US$305 million senior debt facilities. TMA and its private equity sponsor requested a standstill on its crippling debt obligations. The Asia-based senior lender group, comprising over 11 financial institutions, engaged FTI Consulting as financial advisors to advise and negotiate the terms of the standstill.
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After the expiry of the initial standstill period and with the company’s dwindling cash position, the senior lenders appointed FTI Consulting as receivers to safeguard their interests in TMA. In addition, representatives from FTI Consulting were appointed to the board of directors in order to stabilise the situation and provide support to the management of the company.
Throughout the entire process, distressed funds and special situation investors sought to capitalise on the situation and eventually replaced the majority of the original lenders in the senior lenders group.
FTI Consulting’s primary role was to protect the interests of the senior lenders and to ensure the survival of the underlying business. FTI Consulting acted as financial advisors, receivers and reconstituted the majority of the board of directors.
Our role as receivers was to help facilitate a restructuring of the company’s existing capital structure and/or to execute a sale of the business as a going concern. The FTI Consulting team assumed board roles to stabilise the business and ensure a smooth continuation of operations as travel resumed. We assessed the financial position and performance of the business, raised DIP financing to support the ongoing operations and working capital needs, reviewed strategic opportunities to increase revenue streams and minimised costs.
- FTI Consulting commenced an M&A sale process of the underlying business which elicited significant interest from private equity and distressed funds.
- Having acted as financial advisor to the senior lenders, FTI Consulting helped facilitate the consensual restructuring of the seaplane operator’s outstanding US$312 million senior debt.
- A successful restructuring of TMA’s senior and mezzanine debt facilities was completed with certain senior lenders becoming owners of the seaplane operator.