Seychelles said it repurchased Etihad Airways’ 40% stake in its flag carrier for $1, ousted its board and began restructuring the airline’s debt.

Etihad accepted a 79% haircut on $72.3 million of debt owed by Air Seychelles Ltd., Patrick Payet, secretary of state at the nation’s finance ministry, said in an emailed response to queries. The government also offered to pay $20 million to bondholders with $71.5 million of debt outstanding, Payet said.

 Etihad has been unwinding a global expansion plan through which the state-owned Gulf carrier bought a 40% stake in Air Seychelles in 2012. For Seychelles, known for its pristine beaches and diving sites, the revamp of the flag carrier is an opportunity to focus on profitable routes as travel slowly recovers from the pandemic-induced crisis.

 “This is a time of opportunity for both Air Seychelles and the country, as tourism starts to rebuild following the reopening of its borders,” Etihad said in an emailed statement, without disclosing financial details. “Seychelles is an important destination on Etihad’s global network, with bookings steadily increasing.”

Remco Althuis, chief executive officer of Air Seychelles, and Chief Financial Officer Michael Berlouis will remain on until June 30, Etihad said.

The Indian Ocean nation is in talks with the Trade Development Bank for a $31.4 million loan, Payet said. The government will offer $20 million to bondholders and $11.4 million will be used to pay Etihad’s debt from 2022, he said.