US private equity fund buys both Maldivian seaplane operators for undisclosed sum

US-based private equity fund Blackstone has bought a controlling stake in both the Maldives’ seaplane operators, Trans Maldivian Airways (TMA) and Maldivian Air Taxi (MAT).

Blackstone, with annual revenue of US$3.119 billion and total assets of US$18.845 billion, bought the seaplane operators for an undisclosed sum.

Senior Managing Director and Chief Investment Officer at Blackstone’s Private Equity unit based in New York, Prakash Melwani, said the investment “will enable us to build a strong partnership with the Maldives.”

“We are excited to partner with MAT and TMA, whose seaplane operations have contributed significantly to the development of resort islands further away from Male and making them accessible to tourists. Blackstone manages, through its portfolio companies, the largest number of hotel rooms in the world and this transaction marks our sustained enthusiasm for the travel and tourism space,” he said.

Founder of MAT Lars Erik Nielsen and majority shareholders of TMA, Lars Petré and Hussain Afeef, will retain “a substantial shareholding and continue to play a significant role in the companies, including serving as directors on the board,” Blackstone said in a statement.

“The Maldivian economy will gain from the presence of one of the world’s largest and most respected investment firms,” said Petré.

Nielsen stated that the move will benefit the career growth of the workers employed by the two airlines.

“In addition, together we look forward to delivering more efficient services to the tourists coming to the Maldives and the resorts in which they are staying. This combination will increase service efficiency to our resorts,” he said.

TMA Director Afeef said Blackstone would “bring to Maldives a wide global experience and an established track record in the tourism and hospitality sector. Incorporating global best practices would be beneficial not just to the companies but to the tourism industry, in general.”

TMA was started in 1988 as a helicopter operator under the name ‘Hummingbird’, which was changed to TMA in 1998 after the fleet was switched to Twin Otter aircraft. Competing operator MAT was set up in 1992.

Together both airlines operate over 40 aircraft and play both an iconic and critical role in the country’s tourism industry, transferring arrivals at Ibrahim Nasir International Airport (INIA) to resorts in neighbouring atolls and greatly expanding the capacity for tourism around the capital. Domestic air travel over longer distances – to destinations such as Addu Atoll – is served by conventional aircraft.

The substantial investment comes months after the Maldivian government expropriated the main international airport from Indian infrastructure giant GMR, declaring its concession agreement void and ordering it out of the country within seven days. The US$511 million project was at the time the country’s single largest foreign investment.

Tourism Minister Ahmed Adheeb said the Blackstone investment was a sign of confidence in the Maldivian economy, and represented a “green light” to other foreign investors.

“When a large company such as Blackstone invests in the Maldives, it shows that investors have confidence in the Maldives. Moreover, investors have set their sights on Maldives and is on their radar,” Adheeb told local media.

Deal creates a monopoly in critical sector

Former Minister of Economic Development Mahmood Razee, also former Minister of Civil Aviation, noted that the purchase “is not really a foreign investment since no additional equity is being brought into the country. Another firm has just bought the shares,” he said.

Moreover, the purchase of a controlling stake in the only two seaplane operators by a single company had effectively monopolised the market, he warned.

“This is a very exclusive market, and critical to the tourism industry. Even though both MAT and TMA operate the same aircraft, they have not previously been willing to cooperate,” Razee said.

“Now, without any discussion, they have been taken over and effectively become a monopoly,” he said, explaining that the Maldives did not have anti-monopoly laws which may have otherwise obstructed the sale: “We were looking at these when we were putting together the economic reform package [under the former government].”

Previously, resort managers could approach both companies seeking the better price for seaplane services, upon which they were reliant for the vast majority of their guest arrivals: “Now there is no effective competition, as the major shareholder is one and the same,” Razee said.

He acknowledged that “in an ideal world” prices could come down, as the two companies have been operating identical aircraft but duplicating maintenance and other services. However the end of this practice could affect jobs, he suggested.


30 thoughts on “US private equity fund buys both Maldivian seaplane operators for undisclosed sum”

  1. Welcome to official activation of US politics in Maldives. President Waheed and Nasheed works for the same master! Both are competitors but objectives same! watch it

  2. The only two providers of sea plane services (the back bone of tourism) in Maldives creates a MONOPOLY and the regulator does not even have a damn clue that a day light robbery has been committed against free market and competition, you know the country is in the pocket of a rich guy.

    Clearly the economy Regulator (the Economic Development Minister) is snoozing on the job. May be he will say it is the transports authority's job and pass the blame. And the show goes on...

    Soon the ticket prices would be raised and then every one wakes up and blame either that '30 years rule' or 'the anti religious MDP'


  3. I fully with Razee. There is no investment or hard cash brought in by Bridgestone. Just a company that helps to stremaline profit making companies while enjoying profitability through share holding.

    Is Bridgestone going to add more aircrafts or increase Maldivian job opportunities? NO WAY, they may bring professionalism in tapping into this lucrative transport market which makes millions of dollars that the ordinary Maldivian doesn't see or enjoy.

    Now lets look at how Maldives looses from these two companies. TMA has mainly Indian employees and MAT has Sri Lankan. Well I mean employees who earn more than the local maldivians and who hold most of the jobs.

    Profitability. Well champas' money is somewhere in Swedish companies and guess where Lars stacks all what he earns. The government earns peanuts from these two companies and with this new venture, worse is to come.

    Maldivians continue to pay extremely high ticket prices for domestic flights. Whats has TMA or MAT done to assist in having locals travel cheaper??? NOTHING

    A political game to show the public that foreign investment is pouring in, but no one tells us how Maldives or its poor citizens will gain from such moves. Enough of this game!

    Its unfortunate Maldivians have no clue on economics and thats why every tom dick and hurry takes advantage. What a pity....where is IMRAN??????????

  4. What say you our Govt's new privatization, mergers and acquisitions senior politico advisor extraordinnare sheikh imran? About Black tone - the kalhugaagandu!!

    owners of united biscuits, owners of sextape queen Paris Hiltons family fortune hilton group of hotels, also often jointly own companies with Carlyle group (owners of the makers of US military tanks that has killed many thousands of Muslims in Iraq and Afghanistan during the war) , headed by a yahoodhee Jew CEO Stephen schwarzman , yes yes blackstone - kalhugagandu- one of the largest pvt equity firms n the land of infidel - the America - boo hoo! Here they come and now they control our skies!

    Not by owning and operating the airport under a BOOT contract, but for owning the whole damn share and operating all the seaplanes that ever flies in this country!

    Buahahaha where are your morals wise one! Cat got your hell bound tongue! You bring shame to our precious religion by using it to fulfill your hypocritical agenda. Shame on you and the likes of.

  5. Ppl make the connection - champa Afeef - preferred local developer of hilton group. All his properties (crown company) operated by hilton brands.

    Blackstone acquired the premium hotel operator hilton group for approximately $26 billion, representing a 25% premium to Hilton's all-time high stock price in 2007.

    Now blackstone and champs are business partners controlling the entire seaplane transportation business in the republic of Maldives.

    Hell oooooo!!!! Sounds familiar. We are back in the 80s now. Only the privileged get to get rich. Not the rest of us. We just feed off their salaries. Good luck Maldives n many congrats on an amazing closure of a great deal champa!

  6. Both this company are owned by some Maldivian and foreigners already. Government had not spent a single cents in developing these companies . So why imran need to protect these companies by selling the current shares to anyone else.
    both companies are paying GST and profit tax , pension can one expect to pay all profit to government .
    If you want all the profit to go to people then you better change to communist country where everyone will get equal wealth and everyone works and money goes to rulers and then rulers are required to distribute the income among people.

    I guess people who are talking about this kind of thing are asking to go back to stone age

  7. No investments, watch the cut backs and increase in prices as they have bought a monopoly. Wihout healthy competition, the consumer will suffer, = simple law of ecoomics.

  8. This is great news. The way that some resorts treat the staff of the above companies, soon their guest will only have a 8 hour boat ride as the option. This is what you get for treating people dogs poo.

  9. Razi gave GMR the monopoly, each and every investor has the right to invest in seaplane operations in Maldives if they have capacity, but the GMR contract limited the number of international airports in Maldives which decline the growth prospective of private equity holders like Gasim.

  10. Investment from abroad, no no no!!! We can do it all ourselves, like building and running a new airport!! We do not need anyone else!!

  11. these are private companie and they can buy or sell when they want so y does dt have to be our concern.. what if MAT deceided to stop their business and TMA remained. MONOPOLY?? if governments is concerned of monopoly they can simply ask Maldivian to start operate seaplanes or even villa air or mega can do the same.

  12. it could be a buy off but who knows what investment plans they have planned. we need to wait and see. it is a private business so obviously they would consider their profit more than anything else. others have to compete. MAT and TMA or blackstone are not the only potential people here..

  13. Here it is different. Nasheed gave our airport and people airport. These seaplane companies are not our and it belong to a private parties and they have the right to sell their investment.

    Nasheed and his gangs will try every chance to steer up things and fool thier followers.

  14. Did the purported "investment" of USD 300 mn ever came to the Maldives? A resounding NO! So what positive impact does it have on our economy? NIL. This could very well be a racket where the actual owners are still Champa and this Neilson guy. It is likely that they are the ones who are buying it through Black Stone through an private equity fund (where they hold substantial shares), just to avoid paying taxes here!!! A buyout from "left hand to the right"!!

  15. @Kuribee on Tue, 5th Feb 2013 3:26 PM

    "Here it is different. Nasheed gave our airport and people airport."

    Mode, Mody, UK Tourist, and now Kuribee. Whatever, the fcuk you will choose as your next nickname?

    I hope you rot in hell with YOUR airport and PEOPLE airport. What the fcuk is a PEOPLE airport? It's an effing tin shed with a bit of tarmac infront of it. You call that a PEOPLE airport? Moron!

  16. Dhajjaal,

    Thank you for following my comments . People like yourself will never see any wrong doing by Nasheed which is fine .

    In a democratic society there will be people who have difference in opinion and people need to learn to digest them .

    Unlike you, I am not so cheap like you to call you filthy words and i respect you as a human being.

  17. The Blackstone group owns Hilton Worldwide, and with the acquisition of the TMA and MAT, the two companies will undoutedly benefit from the positive association with a U.S based brand. Blackstone group has indicated that this move will assist in gaining more tourists via their agents connections worldwide. Most of the tourists who come to Maldives come through tour operators packages, and with the branding of Maldives company with a multi-billion worth company this will enable more potential tourists to gain access to maldives as a holiday destination.

    Undoubtedly this will assist in getting more tourists to the country.

    This is something that MDP and most of the people commenting here do not want, they do not want the tourism industry to recover, rather they want the industry to diminish and plummet so that they can sarcastically remark, hey look here when MDP is in power our tourism flourished but when MDP isnt look at the status of tourism in Maldives, tourist arrivals are declining.

    To that end, MDP and its supporters will stoop to whatever end possible. (Hint hint ! lets not forget the ongoing boycott called by MDP , its still ongoing (and sadly succeeding, Europe tourist arrivals have declined significantly due to MDP's boycott in the past year)

    But there are people in Maldives who value the investment of a foreign company in Maldives and the hope for positive changes which it will brings, more jobs, more investments in planes, increased flights to remote resorts locations and the prospect of lower ticket fares with economies of scale. With around 60+ resorts in the making, undoubtedly they will benefit from a larger company willing to stake more flights to new resorts locations. And with the integration of the two companies, TMA and MAT, staff will undoutedly benefit from the experiences of the other. And hopefully more jobs created as the joint company expands its operations and hopefully increases salaries !

    But like i said, this is something that some of the people commenting here dont want ! It has to happen on MDP's watch or it shouldnt happen at all ! If MDP isnt at the reign of power then investments should not happen nor should progress ! And if we see such investments becoming initiallised we have to resort to dirt-throwing and demaning comments so as to derail and create a campaign of negative publicity.

    Unless Maldivians can put aside political bickering for the good of national and economic interest, the country will not move forward. But as i said before, some of the people here dont really care...

  18. So after a year or after govt. change, the deal would be void ab initio??!!??

  19. senior managing director of blackstone, Prakash Melwani is of Indian background! Hahahha welcome to the real world you maldivian bozos!!

  20. @virendra

    ab initio should be used as a special device to curb bad investors

    US, unlike India has a good legal framework including a Law on foreign corrupt practices. In other words the US takes responsibility for corrupt practices of its firms engaged in other countries.

    Other aspiring super powers should be doing the same.

  21. Wow,.... Fantastic News. If Maldivians benefits from this then it will be alright, but I wonder how. Already the two companies are hiring Srilankan/foreigners for Flight Attendants. Until this year all Flight Attendants were Maldivians. And there are so many Maldivians who hold commercial pilot license without a job. There is so high rate of unemployment in the country but all the companies are bringing foreigners for the job.

  22. @ Indian

    he he he you have already sold the country to an ex-Italian Baby sitter ..sorry Maldivians cant `t follow your advice....

    20,000 of Arinachal Pradesh is with China ..your beedi smoking army has no back bone to recapture this land.

    he he he already Arunachal Pradesh is in China Map...and these people can visit China without visa.....ever heard????

  23. @Sean
    The reason for sri lankan flight attendants is cause maldivians are uncouth, boorish, unclutured, 'O' level dropouts, loud-mouthed and display 'pseudo-carribean' like traits. Sheesh!! S Y

  24. there is not equity infusion.... this was all borrowed money from HSBC.
    HSBC MAldives and Sri Lanka from what we understand something like 175 million dollars

  25. @kurvi I remember one of your president making emergency calls to our beedi smoking army to save his skin from a dozen Lankan pirates some year back. I wonder what happened to your powerful army that time? But don't worry about us - a malnourished India is still way better than your "glowing" Maldives. All you can do is keep bluffing about your "Chinese card". I will be back here laughing when you figure out, you never had one.


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