Etihad Bondholders Put Airline On Notice With Debt Revamp

Owners of $1.2 billion in debt issued by Etihad and other airlines it partly owned have given the struggling Abu Dhabi carrier an ultimatum to agree to a restructuring or potentially face legal action, two sources close to the situation said, Reuters reported. The move is the latest turn in the unravelling of Etihad’s strategy to embark on global partnerships with airlines, the most high profile of which have since gone bankrupt. A steering committee of debtholders, comprising largely local as well as international investment funds, submitted a proposal to Etihad about a month ago asking the carrier to agree to restructure the two bonds, due in September 2020 and June 2021, but have yet to receive a response, the sources said. The proposal, which has not previously been reported, involves a maturity extension of the debt by up to three years but would require Etihad or its owner, the oil rich Abu Dhabi government, to guarantee the repayment of the underlying loans that were made to airlines partly owned by Etihad such as Air Serbia and Air Seychelles. Read more