If the court recognizes Airbus’ huge claim, there will be significantly less on unsecured creditors.
The expert company Grant Thornton Appraisal services has completed the award of Czech Airlines, which is in bankruptcy at its own request. This is the most detailed look into the management of one of the oldest still operating carriers in the world.
An expert report prepared at the request of the court estimated CSA’s assets at 172 million crowns, while only two creditors would receive about a third of the proceeds from the sale: Quiver Beta (55 million crowns) and Lufthansa Technik (3 million crowns). For other creditors, a small part of their receivables would remain from the sale, a maximum of about five percent. This also applies to thousands of people with tickets that did not fly.
This follows from the report that the court established in insolvency register. The report reveals hitherto unknown facts: for example, the loss of 2.64 billion crowns last year. The conclusions thus add to the Smartwings plan, which proposes to the court the continuation of the company by the so-called reorganization. It is supposed to save the airlines. However, the plan mainly envisages that it will be a “virtual carrier” with a minimum of aircraft.
The authors of the report, together with the tradition and history and holding of certificates, consider the connection with the Smartwings Group to be the main strengths of CSA. On the contrary, in addition to the financial situation, they consider insufficient capacity and an “indeterminate market position” to be weak points.
Revenue from receivables according to Airbus debt recognition
According to the report, the level of satisfaction of the claims of unsecured creditors may differ depending on whether the liability for Airbus and Airbus Canada is included for the ordered Airbus A220 and A321 XLR aircraft, the order of which has already been canceled by the carrier. The value of the receivable is 17.3 billion crowns. If recognized by the court, the satisfaction rate of unsecured creditors would be 0.5847%, otherwise 5.29%.
This means that, for example, for a ticket worth CZK 10,000, the client would receive either CZK 58.47 or CZK 529. CSA itself grants Airbus a receivable in the amount of only 885 million crowns.
If the court decided to go bankrupt, the costs of liquidating the company would reach 147 million crowns according to the report (the final property of 172 million crowns has already been reduced by this amount).
Bankruptcy itself is not very probable due to the negligible percentage of satisfaction of receivables, so with the reorganization, creditors still have a chance to get more than the maximum 5.29%. CSA is currently recording, for example, the development of the price of emission allowances, which it can sell due to limited traffic. “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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