Smartwings has asked the court to extend the deadline for the reorganization plan for Czech Airlines (CSA) until February next year. The company is now completing negotiations with Airbus, which is one of the largest creditors indebted to CSA. It follows from the insolvency register, the zdopravy.cz server pointed this out . CSA has been in bankruptcy since March, and in June the insolvency court commissioned the parent company Smartwings to draw up a reorganization plan within four months. The Municipal Court in Prague will decide on a possible extension of the deadline.
According to Smartwings, the reason for extending the deadline for submitting the reorganization plan is the advanced negotiations with Airbus regarding the debt for the uncollected A321Neo and A220 aircraft. The manufacturer subsequently canceled the order. Airbus registered a debt of CZK 17 billion in insolvency proceedings with CSA.
“Negotiations with Airbus’ creditors are currently at an advanced stage, with specific draft settlement agreements being exchanged between the parties,” Smartwings said in a proposal. This fact will have a major impact on the satisfaction of other registered and unsecured creditors of the debtor, “the proposal states.
In the proposal, Smartwings further stated that they are also negotiating intensively with a new investor who would join CSA. However, according to the proposal, his input also depends on the result of negotiations with Airbus. They do not state the name of the investor.
Creditors indebted to CSA have so far filed claims for more than 19.4 billion crowns in insolvency proceedings with the airline. 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’s fleet was reduced 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.