Legal documents seen by Reuters showed that a court in New York sent summons to Etihad Airways and Fitch Ratings this week, requesting a document that is the focus of a $ 1.2 billion debt dispute issued by the Abu Dhabi carrier and partially owned airlines.
Investors - including BlueBay Asset Management specializing in fixed income instruments - are requesting access to a "debt bearing agreement" signed by the UAE federation and the Italian carrier Alitalia in 2016, before Alitalia goes bankrupt.
Etihad issued bonds in 2015 and 2016 through a special purpose company based in Amsterdam (EA Partners) that then distributed money to Etihad and other airlines, including Alitalia.
According to disclosures provided by the EA Partners to the London Stock Exchange and a Fitch report issued in May 2017, the union agreed to cover the debt owed to Alitalia under the debt bearing agreement.
Investors believe the document will help them recover a portion of the money they invested in bonds, and they requested access to them in a lawsuit they filed on June 16 in the US District Court for the Southern District of New York.
Disclosure orders
Judge P. Kevin Castle agreed to their request and issued hand-over summons to the registered agents of Fitch and the Federation in New York ordering them to disclose the debt agreement in accordance with legal documents seen by Reuters.
A source familiar with the matter said that the union and Fitch have until July 7 to respond to or oppose the matter.
A Blue Bay spokesman referred the request for comment to the group of investors, which it said was considering engaging in consultations with Etihad and its airlines.
"We are exploring our options, but we remain open and willing to engage with the union," the group said in an emailed statement.
The bondholders' request comes after previous attempts to find solutions to restructure the debt, including a proposal submitted last April, which the Federation did not respond to.
The Abu Dhabi-owned carrier spent billions of dollars in acquisitions of airlines that failed to deliver the expected returns.
Some airlines with which Etihad entered the partnership went bankrupt since then, and bonds issued in 2015 and 2016 are trading at about 45 cents in the dollar.
The company has lost $ 5.6 billion since 2016, and has laid off hundreds of workers under the impact of the Corona Virus pandemic.
A report in the French newspaper Les Echos published last March spoke about the possibility of the bankruptcy of companies that have significant operating costs or are subject to aviation restrictions due to the Corona pandemic, among which he mentioned "Etihad Airways".