In Sunday’s edition, we discussed the case of Tunisair, its major difficulties and the poor management of this situation by all Ministers of Transport and all governments.
Tunisair has just published its financial statements for the 2021 fiscal year.
That year again, it ended with a deficit of TND 265.9 million, an increase of nearly TND 34 million. Its equity was negative by more than TND 1.24 billion, while its share capital was just TND 106.2 million. In other words, Tunisair had “eaten up” more than ten times its capital.
So the Tunisian public airline is still far from being out of trouble, and this will certainly not help its situation, or that of the Minister of Transport and the female management team he installed, since Khaled Chelly was placed under seal, still in prison on unknown charges, and still has not appeared before the courts despite months of detention! Here is, in any case, what Tunisair’s auditors have to say:
TND 1.813 billion in losses in 2021, putting all of Tunisair at risk
“Following economic, technical, and social difficulties that have persisted over several consecutive years, and also due to the decline in the company’s activity during 2020 and 2021 as a result of the global consequences of the COVID‑19 pandemic, cumulative losses as of December 31, 2021, reached TND 1,813 million, generating a total negative equity of TND 1,241 million (including TND 1,076 million for OACA).
These conditions, together with other points described in the paragraph ‘Basis for qualified opinion,’ reveal the existence of significant uncertainty about the company’s ability to continue operating.
As a result, this situation places the company under the provisions of Article 388 of the Commercial Companies Code, which calls for a General Extraordinary Meeting that must decide within four months whether to dissolve Tunisair.
If the General Extraordinary Meeting does not meet within the specified period, any interested party may request the judicial dissolution of the company.”
The Tax Authority holds firm and refuses the VAT refund
“At the end of 2022, the company signed an amicable agreement with the tax administration following the notification in November 2021 of the results of a detailed tax audit related to the previously filed request for reimbursement of Value Added Tax for 2017, 2018, 2019, and 2020.
However, the auditors noted a discrepancy between the figures on the tax notification and the accounting balances at the close of the said fiscal years, not to mention difficulties in justifying accounts related to stamp duty and withholding tax.
The auditors consider that a due diligence review is necessary to evaluate the potential tax risk and, if necessary, determine the provisions required.”
A320 engines are still held and case is before Paris Commercial Court
Under an agreement between TUNISAIR‑SA and its subsidiary, Tunisair TECHNICS was tasked with performing maintenance on six aircraft engines owned by TUNISAIR‑SA.
Tunisair TECHNICS, in turn, used an intermediary to carry out the maintenance with the service provider, for a total sum of around 35.6 million USD.
Due to a financial dispute between the intermediary and Tunisair TECHNICS regarding amounts owed and payment terms, four of the six engines were held by the maintenance provider.
This dispute was brought before the Paris Commercial Court (TCP) and remains unresolved at the time of this report.
The potential financial consequences of this dispute involving the company and/or its subsidiary Tunisair TECHNICS have not been estimated or reflected in the accompanying financial statements.
Moreover, contrary to the decision of the company’s Board of Directors on March 29, 2023, management reached an arrangement with the maintenance provider before the dispute was resolved by the Paris court.”
This catastrophic dashboard, however, only reflects the 2021 fiscal year. Theoretically, and barring extraordinary developments, the financial situation of the company, still publicly listed, despite breaking all records for non-publication of financial statements, is expected to deteriorate further.
