3 October 2024, Port Vila: Air Vanuatu has announced today that the Supreme Court of the Republic of Vanuatu (“Supreme Court”) has approved the implementation of the Deed of Compromise with Air Vanuatu and AV3 Ltd (“AV3”), formalising the terms of the creditor compromise approved at the meeting of creditors held on 21 August 2024.

The Supreme Court’s orders in respect of the implementation of the Deed of Compromise include, among other things, the transfer of shares in the Company to AV3 and the termination of the Company’s liquidation. The liquidation of Air Vanuatu is terminated with effect on and from the date that is two business days after the date that the shares in Air Vanuatu have been transferred to AV3. The control of Air Vanuatu will be handed back to management once this occurs.

Liquidator Morgan Kelly, Partner in Strategy & Transactions at Ernst & Young Australia (“EY Australia”) said the execution of the Deed of Compromise is a positive outcome for the airline and its creditors.

“We’re very pleased the Supreme Court of Vanuatu ratified the Deed of Compromise. The implementation of the Deed of Compromise maximises the return to creditors and presents an opportunity for the Air Vanuatu business to continue, saving jobs and providing vital aviation services for Vanuatu.”

“We would like to thank the Vanuatu Government and the Civil Aviation Authority Vanuatu for their ongoing support during this process. Their collaboration and assistance have been instrumental in reaching this positive outcome.”

The Liquidators also acknowledged the contributions of the EY team and their solicitors. “Andrew, Justin and I would like to acknowledge the extraordinary efforts of the EY team who have worked extremely hard, especially to stabilise the business and resume operations, and also thank Hurley Lawyers and K&L Gates for their roles in achieving this outcome.”