TRANSACTION INTERVIEW 91 Please tell us more about the restructuring and Fréget Glaser’s involvement in the proceedings. Air Austral started encountering difficulties with the COVID-19 pandemic in 2020. As the crisis persisted, these difficulties became very serious in 2021 and 2022 and it became necessary for Air Austral to seek new financing and open its capital. Also, the region wanted to reduce its participation in the company to below the majority threshold. Several options were considered, including a merger with another airline, Corsair, but none of these options panned out. In the summer of 2022, a group of Réunion investors – in a clear sign of the importance of Air Austral for the people and the businesses of the Region – made an offer to acquire 55% of the company through an ad hoc company, Run Air, and negotiations started on this basis, under the CIRI’s aegis. We advised the region and the Sematra on this operation from the fall of 2021. We advised on all aspects pertaining to public law, privatisation law, merger control and state aid. Our Veil Jourde colleagues handled the corporate and restructuring aspects and we had the assistance of a Réunion lawyer, Djalil Gangate. What unique considerations and obstacles had to be taken into account during the operation? This operation was particularly complex due to the different legal aspects, including administrative, competition, state aid, corporate and restructuring law, that had to be taken into account. Also, numerous authorisations were needed: the European Commission as the operation implied important state aid; the Privatisation Commission as the majority of the capital of Air Austral, which was initially owned through Sematra by public authorities (principally the Réunion region) was to be transferred to private owners, and the French Competition Authority. The Réunion region also had specific interests that needed to be taken into account and preserved: it had created Air Austral in 1990 and had accompanied the growth of the company from that time, through good and bad, investing important funds into supporting it. But, at this point, the region wanted to reduce its exposure and transfer the majority of the capital to private owners. At the same time, because of the importance of Air Austral for the local economy in terms of activity, jobs and territorial continuity with France’s metropolitan territory, it could not simply relinquish that control and wanted to be able to keep an eye on things. Also, there was a very strong time constraint because the extremely difficult financial situation of Air Austral at the end of 2022 and the beginning of 2023 made it imperative that we obtain all these authorisations and finalise the operation by the end of January. This was made possible through very good coordination of the processes before each of these authorities. What unique skills and expertise did your team bring to ensure the restructuring’s success? Our firm is built on the belief in the strong complementarity between public economic law and private competition law. We combine a unique expertise in the legal frame applying to economic intervention of public authorities (especially in the context of a privatisation process), of merger control procedures and of European state aid regulation. This was especially important for an operation in which the seller was a local authority with specific constraints. Emmanuel Glaser Fréget Glaser & Associés Our firm is built on the belief in the strong complementarity between public economic law and private competition law.
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