Blackstone is close to reacquiring Trans Maldivian Airways at nearly its original sale price after Bain Capital and Tempus Group struggled financially due to the pandemic. TMA, which connects resorts in the Maldives, saw its operations falter and underwent debt restructuring. The company now aims to stabilize and grow amidst a competitive tourism landscape.
Blackstone is nearing a deal to reacquire Trans Maldivian Airways (TMA), the world’s largest seaplane charter operator, at approximately the same valuation as its original sale price from eight years ago. This potential transaction involves the purchase from a consortium led by Bain Capital and the Chinese firm Tempus Group. Blackstone originally sold TMA for $500 million in 2017, following a substantial return on a $98 million investment.
The past eight years have proven tumultuous for TMA, primarily due to the COVID-19 pandemic, which severely impacted its operations, leading to bankruptcy and a subsequent debt restructuring. Following their acquisition, Bain Capital and Tempus struggled to maintain profitable operations and ultimately defaulted on a $305 million loan. As a result, a new lender consortium took over, led by Carlyle and others, who now control TMA’s operations.
Under Bain’s ownership, TMA attracted investment totaling $115 to $120 million in debt and equity, aiming to capitalize on high-end tourism in the Maldives. However, pandemic-related travel restrictions led to poor financial performance, prompting lenders to seek a valuation between $550 and $700 million for TMA. Interest from other private equity firms in the airline sector has generally been limited due to the instability caused by external factors, such as the ongoing global health crisis.
Currently, TMA operates 65 DHC-6 Twin Otters, serving over 80 resorts across the Maldives and conducting more than 400 flights daily. The company, which began as Hummingbird Island Helicopters in 1993, saw its fortunes closely tied to the travel industry. Although the pandemic forced the company to ground its planes, it has since adapted by replacing scheduled flights with on-demand services to serve clients better.
As competition in the Maldives tourism sector remains high, particularly between India and China, the ongoing recovery of leisure travel may offer new opportunities for growth and stability once the acquisition is finalized.
The impending reacquisition of Trans Maldivian Airways by Blackstone highlights significant shifts in ownership and operational challenges within the airline sector, particularly in response to external disruptions such as the pandemic. Despite a previously lucrative investment, the journey towards recovery and profitability is fraught with risks. The future of TMA now hinges on its ability to navigate these challenges within the revitalizing travel industry, as tourism steadily begins to regain momentum.
Original Source: infra.economictimes.indiatimes.com
