Czech Airlines

William Malcolm

Czech Airlines Creditors Seek To Claw Back Over 19 Billion Crowns

The creditors of indebted Czech Airlines (ČSA) have so far filed claims for more than 19.4 billion crowns in insolvency proceedings with the airline. There are around 5,900 registered creditors of the company. The insolvency court has so far reviewed the debts for approximately 845 million crowns. This follows from the current information of the Municipal Court in Prague. CSA has been in bankruptcy since March, but its operations continue. The company declared a plan for reorganization with the aim of rescuing it.

On Monday, the Municipal Court reviewed another part of the registered claims. So far, it has registered 5,675 applications, and there are about 200 more creditors. So far, the court has assessed over half of them for a total of 845 million crowns. However, according to information from the insolvency administrator, the total amount of unsecured receivables as of 19 August was CZK 19.41 billion. This includes large receivables from Airbus and Airbus Canada Limited Partnership. In its own proposal for insolvency, CSA stated debts worth 1.8 billion crowns.

Already in June, the court, in agreement with creditors, approved the reorganization of CSA, which will be led by the parent Smartwings. The role of insolvency administrator has been performed by the Karviná company Inskol since March, represented by Michael Šefčík. The court also commissioned Grant Thornton to draw up an expert opinion assessing CSA’s assets, which would be distributed to creditors in the event of the company’s bankruptcy. According to the report, the substance is 172 million crowns, while according to this report, the airline ended up losing more than 2.64 billion crowns last year.

CSA was hit by the effects of the coronavirus epidemic, the carrier had to cancel a large number of connections. He laid off about 300 workers last year due to losses. In February, the company announced to the Labor Office its intention to lay off all 430 employees. In this context, CSA pointed out that this is one of the steps in the planned reorganization, and the intention does not necessarily mean the release of everyone. Due to the crisis, the airline fleet also thinned to two aircraft. However, the operation continues.

The parent company Smartwings also found itself in economic difficulties due to the coronavirus crisis and flight cancellations. The company draws a loan from four banks for two billion crowns. In total, the carrier’s financing will exceed seven billion crowns, additional money should be provided by Czech shareholders, support for leasing companies and restructuring.