By George Alleyne
LIAT Airlines the transportation
service that operated
like a de facto regional air taxi
that was last week on the verge
of liquidation may be coming
back from the dead but
under a different ownership
structure.
During a Monday night videoconference
at least two of
the four regional owners, Barbados
and St. Vincent and the
Grenadines, reportedly decided
to hand over their shares
to Antigua and Barbuda, home
of the airline’s headquarters,
effectively ceding ownership.
Along with the fourth
owner, Dominica, they are said
to have agreed to sell three
of the company’s newest aircraft
to clear off a substantial
part of debt, go ahead with
liquidation proceedings to reorganise
the remaining liability,
following which the other
aircraft will again take to the
air in 60 to 90 days to render
service.
Facing continued financial
struggles the Caribbean’s dedicated
air taxi service was set
to be closed but this decision
gave rise to a dispute among
regional prime ministers, with
Antigua Prime Minister Gaston
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Caribbean L 18 ife, JULY 24-30, 2020
Browne accusing the other
owners of allowing themselves
to be led to the decision by
major shareholder Barbados
that had plans to introduce
other small airlines to replace
LIAT.
Browne, who levelled the
same accusation to St Vincent,
had earlier this month insisted
that LIAT could have gone into
liquidation proceedings, reorganise
its debt, obtain new
financing and resurface as
the Caribbean’s main carrier
again.
There followed bickering
and crosstalk between PMs
Browne and St. Vincent’s
Ralph Gonsalves, LIAT’s chairman.
Barbados Prime Minister,
Mia Mottley, at the same time
announced that there were at
least six small airlines lined up
to fill the gap created by LIAT’s
departure. A St Vincent company
has since applied to relocate
to Barbados. It is unsure
if this airline, ‘One Caribbean’
is among the six to which Mottley
referred.
According to media reports,
the four LIAT principals sat
down for a virtual meeting
this week and the outcome
points to Barbados and St.
Vincent washing their hands
of the airline by passing over
ownership to Antigua at the
nominal fee of $1. These transfers
amount to 60 per cent of
the shareholding. It adds to
Antigua’s 34 per cent ownership,
with Dominica accounting
for the remainder of the
.7 per cent of the public shareholding
to make up 94.7. The
remainder is in the hands of
private investors.
While the two shareholders
are departing, as signatories to
previous loan agreements they
are still however saddled with
the company’s massive debt,
largest of which is the $65 million
borrowed from the Caribbean
Development Bank in
2013 to purchase three aircraft
for fleet modernisation.
The owners, two now former,
agreed to sell those planes to
raise cash to address the CDB
loan.
In a broadcast to his nation
following the Monday night
meeting, Browne said that sale
of the aircraft would reduce
Antigua and Barbuda Prime Minister, Gaston Browne. Photo
by George Alleyne
the company’s all-round debt to
$45 million for which the four
countries will share responsibility.
Before the meeting Browne
had circulated a reorganizational
plan calling for reinvestment
of $40 million, half of which
Antigua would guarantee.
But the new soon-to-be
majority owner – following formalisation
of the agreement –
has warned that the restoration
work has just begun.
“Our challenges have just
started but we are not daunted
by challenges and we feel confident
that we will be able to
raise the necessary capital so
that we can put LIAT back into
the air to have it flying and to
restore LIAT to profitability and
sustainability and we will be
using every effort in order to
ensure that those objectives are
achieved,” Browne said.
Major LIAT ownership shift
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