Blackstone Set to Reacquire Trans Maldivian Airways After Eight Years

Blackstone is finalizing a deal to reacquire Trans Maldivian Airways, its previous acquisition, for nearly its original selling price. This follows operational difficulties faced by TMA linked to the pandemic and subsequent bankruptcy. The air operator, now under new ownership, has reported significant revenues and operates a large fleet, highlighting the challenges and opportunities in the aviation industry post-COVID.

Blackstone is poised to reacquire Trans Maldivian Airways (TMA) at a price close to its original selling figure nearly eight years ago. The private equity firm is nearing a deal with a consortium led by Bain Capital and China’s Tempus Group, which had taken ownership following Blackstone’s $500 million exit. This development occurs after TMA faced operational challenges and bankruptcy, highlighted by the pandemic’s adverse effects.

In 2017, Blackstone executed its largest exit in Asia by transforming a $98 million investment into a substantial $500 million return, significantly benefiting its Indian franchise. However, Bain’s strategy to capitalize on leisure travel to the Maldives faltered post-pandemic, resulting in a $305 million loan default. Consequently, the company underwent debt restructuring under a new lender consortium comprising Carlyle, King Street Capital Management, and Davidson Kempner Capital Management.

TMA’s revenue was reported at $177.9 million in 2024, with projected EBITDA estimated between $70 and $80 million for the current fiscal year. Various private equity firms and businesses, including Apollo Global Management and CVC Capital Partners, have been approached regarding investment opportunities. However, concerns about potential external shocks in the airline sector have deterred many from engaging.

Expectations from lenders for TMA’s valuation range from $550 to $700 million; nevertheless, interest from prospective buyers has been tepid due to the high price. TMA has evolved since its inception as a helicopter service in 1993, currently operating a fleet of 65 DHC-6 Twin Otters and conducting over 400 flights daily, serving more than 80 resorts across the Maldives.

Linked to the travel and hospitality sectors, TMA suspended its scheduled services during the pandemic, pivoting to on-demand offerings instead. Furthermore, competition between India and China for tourism dominance in the Maldives has become apparent, with trends shifting in 2024, impacting overall travel patterns.

In summary, Blackstone’s anticipated reacquisition of Trans Maldivian Airways represents a noteworthy development in the aviation sector, particularly following the financial strain post-pandemic. This transaction underscores the volatility within the airline industry and the challenges faced by firms operating in the leisure travel market. With an established fleet and extensive network, TMA’s financial recovery remains interlinked with global tourism trends, especially in the Indian Ocean region.

Original Source: infra.economictimes.indiatimes.com