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TMA at a loss in paying off USD 300 million loan: Reuters

Shahudha Mohamed
20 August 2020, MVT 16:48
Seaplane giant Trans Maldivian Airways (TMA)'s planes grounded at their operating terminal. Due to the economic repercussions of the ongoing COVID-19 pandemic, TMA is reportedly struggling to pay off its USD 300 million loan. PHOTO: SOCIAL MEDIA
Shahudha Mohamed
20 August 2020, MVT 16:48

International news organisation Reuters reported that Trans Maldivian Airways (TMA), owned by American buyout firm Bain Capital, is "struggling to repay" its USD 305 million (MVR 4.7 billion) loan due to the economic repercussions of the ongoing pandemic.

According to sources, Reuters reported that TMA, the world's largest seaplane operator, is "currently grappling with grounded planes and almost zero revenue".

The USD 305 million was taken to settle TMA's acquisition cost when Bain bought the seaplane operator in 2017. The US firm struck a joint-deal with two other companies to buy TMA for a total of USD 500 million (MVR 7.7 billion).

Sources told Reuters that Bain has been given a deadline to settle the loan by the end of August.

However, both Bain Capital and TMA have yet to comment on the matter.

The pandemic-induced economic shortfalls befell at a time when efforts were underway for TMA to relocate its operations to the newly constructed seaplane terminal in airport island Hulhule'.

Developed by Maldives Airports Company Ltd (MACL), the seaplane terminal became an epicentre of controversy over "guarantees" that TMA will secure a considerable area of the terminal for long-term lease.

Amidst the dispute, Ministry of Finance declared that an area equivalent to that of TMA's current terminal will be leased to the seaplane operator for a two-year period.

However, MACL has yet not yet signed a lease agreement for the seaplane terminal with any airline.

As with numerous countries around the world, in the wake of the ongoing COVID-19 pandemic, Maldives closed its air and sea borders to tourist arrivals on March 27, halting the issuance of on-arrival visas.

The restrictions on international travel has left Maldives' heavily tourism reliant economy in an extremely vulnerable state. By mid-April, the World Bank projected that the island nation would likely be the worst-hit economy in the South Asian region due to the pandemic.

Maldives estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency and a state deficit of MVR 13 billion in 2020 as a result of the COVID-19 pandemic's impact on the tourism industry.

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