Air Moldova has submitted to court a request to enter a pre-insolvency accelerated restructuring procedure. The airline says the move will help it avoid bankruptcy and absorb some $50mn from unnamed investors, according to a company press release.
The company blames its difficult financial situation on the debts inherited on privatisation, the loss of revenues during the COVID-19 crisis and the ban on flights after the invasion of Ukraine. It highlights that the state did not extend any financial support, while foreign airlines were helped out during the COVID-19 crisis.
The company suspended all flights and ticket sales starting May 2. The resumption of activity will be possible within three days from a positive court decision, the company said.
"Investors are ready to invest around $50mn in Air Moldova. These investments would settle the company's financial problems and would allow the company to renew its own fleet. Investments cannot be made outside the accelerated restructuring procedure due to the increased risk of an attack from existing creditors," says Air Moldova.
The airline said that the accelerated restructuring will allow the company to use the capital injection strictly for the development of the company, so that later, in time, the existing debts will be paid.
Air Moldova was privatised in 2018 but the identity of the investors was never made public.
Parliament speaker Igor Grosu said on April 21 that the airline belongs to fugitive politician and businessman Ilan Shor, who was given a 15-year sentence for his role in the $1bn bank fraud scandal earlier this year.
The suspension of flights in May follows an earlier decision, announced in March, to suspend flights, though shortly afterwards the company confirmed three flights — two to Italy and one to Tbilisi in Georgia (a route that indirectly serves Russia).
Meanwhile, also in March, Chisinau International Airport (AIC) was returned to the control of the Moldovan government. Previously the company had been managed by Avia Invest — a company controlled by groups linked to Shor.
The management of Chisinau International Airport was transferred to Avia Invest in November 2013, based on a public-private partnership. The holder of the concession contract committed to managing the airport for 49 years and to invest €250mn to modernise the airport.
However, the state later demanded the termination of the contract as the investments were not carried out in line with the schedule. In November 2022, the Chisinau Court of Appeal decided to cancel the concession contract for Chisinau International Airport.