Consultants advise on restructuring of Trans Maldivian Airways

19 July 2021 Consultancy.asia 3 min. read

Trans Maldivian Airways (TMA) has a new set of creditors: private equity giant Carlyle Group and New York hedge funds King Street Capital Management and Davidson Kempner Capital Management are on board – following nearly a year of restructuring efforts overseen by consultants.

The world’s largest seaplane operator: TMA’s fleet of 56 seaplanes – built to shuttle tourists between Maldivian islands – has been grounded since the pandemic-induced breakdown in travel last year.

By September 2020, TMA majority owner Bain Capital had defaulted on a $270 million loan – and the company was placed under receivership with FTI Consulting experts, with aims to restructure the sum total of $300 million in outstanding debt. Roughly 10 months later, FTI Consulting has announced a new lender consortium is set to take on the debt burden.

Trans Maldivian Airways has a new set of creditors

“Having acted as financial advisor to the senior lenders, FTI Consulting helped facilitate the consensual restructuring of the airline's outstanding debt,” said the firm in a statement.

“The transaction is intended to help provide a strong foundation for strategic business growth and pave the way for TMA to focus on enhancing its seaplane operations as it expands its key role in facilitating tourism and supporting jobs in the Maldives.” 

FTI Consulting’s restructuring team was led by Melbourne-based restructuring veteran John Batchelor, as well as a Hong Kong team: senior managing director Ken Fung, managing director Greg Wong, and senior restructuring consultant Yoyo Leung. 

Meanwhile, Alvarez & Marsal experts advised the mezzanine lender during the restructuring. Acting as receivers over the shares of TMA’s intermediate holding company, Alvarez & Marsal successfully restructured the mezzanine lender’s debt, and is currently continuing its support in an advisory capacity, now focused on value maximisation. 

The firm’s team is led by managing directors Ronald Thompson, Edward Middleton, and Tiffany Wong, supported by director Jet Fai Chu, senior manager Di Wand and manager Fiona Mok.

New ownership

Taking the TMA reigns are a set of US-based investment giants. Private equity house Carlyle Group’s global credit unit – which managed the TMA deal – currently reports nearly $60 billion in assets under management, while Davidson Kempner and King Street boast more than $30 billion and $20 billion respectively. 

Reuters reports that TMA’s existing management team will remain intact, while the board will be reshuffled to include – among others – TMA co-founder Lars Erik Nielsen. Outgoing TMA owners Bain Capital and Chinese travel group Tempus will retain minority stakes in the airline. 

Together, the lenders and leadership will work to bring TMA back to profitability – at a time when global tourism is steadily on the up. Maldives nestles within Asia Pacific’s sizeable tourism market, and TMA will be hoping to ride the upward wave. 

“We anticipate the vaccination rollout will continue and we will go back to some sort of normality in the Maldives by sometime during 2022,” said Carlyle managing director Ian Jackson to Reuters.