By Elesha George
“It will fly again, even if it’s one plane,” declared Prime Minister Gaston Browne before heading into Monday’s meeting with LIAT’s shareholder governments and directors, optimistic that they would buy into his restructuring plan.
Browne, who up until Monday morning did not have any firm financial commitment for LIAT 2020, indicated that some regional governments as well as private sector companies had signalled their interest and had given “tentative commitments”.
“We will not give up on LIAT; LIAT is too important an institution to Antigua and Barbuda and the wider Caribbean for us to allow individuals to utilise any form of malevolence to kill LIAT and to destroy that brand that has existed for years. It is part of our existence, it is part of our legacy and it will be part of our future,” he remarked.
Even as two of the four shareholder governments seem unwilling to carry on the operation, on Saturday, Browne published on Facebook, his government’s plan to reorganise and restructure LIAT rather than cause it to liquidate.
The proposal would result in an injection of new equity that would cover at least 50 per cent of outstanding staff liabilities. It would also require new capital of up to EC $108 million of which Browne said Antigua and Barbuda is prepared to invest EC $54 million – 50 per cent of the necessary investment.
Additionally, the Companies Act recently amended in parliament, would allow for the appointment of an administrator who would temporarily replace directors and shareholders as the sole representative of LIAT’s estate. That administrator would also be in charge of reorganising the company by cutting costs, realigning expenses and re-examining profitable routes.
The government wants to use the Companies Act to enable an automatic stay against the airline’s creditors which would allow the administrator to negotiate better payback terms.
Browne said if the reorganisation fails, then the administrator could proceed to liquidate the airline and if existing shareholder governments are not interested in investing in LIAT 2020, they will be required to surrender their shares.
“All we’re asking for is that they do not stymie our efforts to move with the reorganised LIAT and for them to give up their shares for $1 – their worthless shares as they so determined,“ he said.
Browne claimed that $1 is 100 per cent more than the shareholders would get in liquidation given the immense debt that the company is in.
If the other shareholders refuse, Browne said “Antigua and Barbuda will be forced to take defensive measures in order to protect the interest of all stakeholders to include the staff at LIAT and other creditors”, making no further comments on the matter.
On Sunday, Prime Minister of St Vincent and the Grenadines and chairman of the shareholder governments, Dr Ralph Gonsalves, reportedly offered to sell his shares to Antigua and Barbuda because he didn’t want to stop them from “doing what they want to do”.
However, Gonsalves said Antigua and Barbuda would have to pay the value of debt his government owes the Caribbean Development Bank (CDB) for three planes purchased by the airline.
If shareholders choose to liquidate the airline, LIAT workers in Antigua and Barbuda would require more than $80 million in severance, as the country has the largest percentage of employees.
By Elesha George