Carlyle takes over Trans Maldivian Airways from Bain Capital

Carlyle Group Inc said on Thursday it has taken a majority stake in Trans Maldivian Airways (TMA), the world’s largest seaplane operator, from buyout firm Bain Capital following a debt restructuring deal.

TMA began negotiating debt relief with Carlyle and its other creditors after the airline grounded most of its fleet of 56 seaplanes last year, as the Covid-19 pandemic halted travel and tourism into the Maldives.

Terms of the transaction were not disclosed, but people familiar with the matter, who requested anonymity, said Carlyle took majority ownership of TMA from Bain in exchange for agreeing to restructure the airline’s outstanding debt of about $300 million.

Lenders including hedge fund managers King Street Capital Management and Davidson Kempner Capital Management LP took stakes in TMA alongside Carlyle. Bain and Tempus Group, a Chinese tourism-focused conglomerate, retained minority stakes in TMA, according to the sources.

“This transaction marks the beginning of a new chapter for TMA. We look forward to the support of our new owners as we ramp up business and continue providing the world-class service our customers have come to expect,” AUM Fawzy, CEO of TMA, said, in a statement.

“As we do that, the health and safety of our customers and employees remain fundamentally important to both management and our new shareholders and we will continue to follow our industry-leading protocols to ensure the welfare of those involved in TMA’s operations.”

Carlyle said TMA’s current management team will remain in place. A newly reconstituted board will include Lars Erik Nielsen, one of the airline’s founders.

“Our deep experience working with aviation companies positions us well to work alongside our partners at Carlyle and Davidson Kempner as we help lead the company to a strong recovery and its next growth stage,” Zachary Lewis, Managing Director at King Street, said, in the statement.

Bain Capital had owned most of TMA since 2017, when it paid over $500 million in a leveraged buyout deal, together with Tempus, to acquire the airline from Blackstone Group Inc.

Airlines are expecting that widespread vaccinations and the easing of travel restrictions will lead to a rebound in domestic and international flights as more people book trips for business and leisure.

Carlyle’s acquisition of TMA was carried out by the private equity firm’s global credit unit, which has $59 billion in assets under management.

“TMA is an operationally strong business with an experienced management team and clear competitive advantages. We are pleased to provide the strategic capital and expertise the company needs to return to growth,” Christian Schmitz, Managing Director of Carlyle Global Credit, said, in the statement.

“As vaccines continue to be rolled out globally, we expect travel to return to pre-pandemic levels in the Maldives, which remains one of most attractive vacation destinations in the world.”

Note: The above is based mainly on reporting by Reuters.

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