The carrier and its owner asked the court to extend the deadline for the reorganization plan until February, negotiations with Airbus are being finalized.
Smartwings is asking the court for extra time to submit a reorganization plan. He cites advanced negotiations with Airbus on debt for unclaimed A321XLR and A220 aircraft as a reason. The manufacturer registered a claim of CZK 17 billion in insolvency proceedings with CSA.
The court gave four months to draw up the plan in early June, and the airlines are now asking for an extension, according to the insolvency register. “Negotiations with Airbus’ creditors are currently at an advanced stage, with specific draft settlement agreements being exchanged between the parties,“Said Smartwings in the proposal. They demand an extension of the deadline until February 4 next year.
Czech Airlines has ordered four A220 and three A321XLR aircraft from Airbus. This summer, Airbus’ list of orders showed that canceled the contract. Smartwings expects an agreement during October. “This will have a major impact on the satisfaction of the debtor’s other registered and unsecured creditors.” stated in the proposal. Airbus registered over 17 billion in receivables, which is several times higher than the total amount of unsecured receivables of other registered creditors.
Smartwings stated in the proposal that at the same time they are intensively negotiating with a new investor who would join CSA. However, according to the proposal, his entry is also linked to the outcome of negotiations with Airbus. The name of the investor does not state.
CSA has been in bankruptcy since the beginning of this year at its own request. The expert company Grant Thornton Appraisal services recently completed the Czech Airlines award. The expert opinion prepared at the request of the court estimated CSA’s assets at 172 million crowns.
Czech Airlines currently benefits mainly from the sale of emission allowances and their rising prices. They have them allocated free of charge for several years. “The debtor’s cash flow is positively affected by divestments of emission allowances, from which the operation of the debtor’s company is partially financed, “ said the insolvency administrator, which is Inskol. Back in April, the company had only 15.5 million crowns in its accounts, at the end of June already 105.5 million crowns. Thanks to this, according to the administrator, there is no reason to stop CSA’s operation or enter bankruptcy.
Czech Airlines currently flies only one aircraft, the other is out of service for technical reasons. In the first six months of this year, they lost a total of 103 million crowns.
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