‘Eti­had, Abu Dhabi likely to re­ject bond­holder com­plaints’

Gulf Times Business - - BUSINESS -

A file pic­ture taken on Oc­to­ber 14, 2012 shows the Eti­had Air­ways head­quar­ters in the Emi­rati cap­i­tal Abu Dhabi. Eti­had Air­ways and Abu Dhabi’s Depart­ment of Fi­nance are likely to re­ject calls for a meet­ing with dis­grun­tled bond in­vestors in the be­lief that their com­plaints have no le­gal merit, sources close to the mat­ter told Reuters. In 2015 and 2016 Eti­had is­sued $1.2bn in bonds in a part­ner­ship with air­lines it partly owned at the time, in­clud­ing Al­i­talia and Air Berlin. The bonds are now in de­fault be­cause the Eu­ro­pean air­lines, which are now in­sol­vent, have not hon­oured their part of the obli­ga­tions. The sources said that a group of in­ter­na­tional in­sti­tu­tional cred­i­tors have com­plained to Eti­had and the Abu Dhabi Depart­ment of Fi­nance that, when the bonds were mar­keted, Eti­had had promised to sup­port the other air­lines to make them prof­itable. “By def­i­ni­tion, that means it would have sup­ported the air­lines to cover their debt obli­ga­tions,” one of the sources said. The group of cred­i­tors is mostly com­posed of hedge funds and is be­ing ad­vised by law firm Dechert, which de­clined to com­ment. Eti­had de­clined to com­ment, while Abu Dhabi’s Depart­ment of Fi­nance did not re­spond to a re­quest for com­ment.

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