Antigua first to be repaid if new LIAT does not work out

22

Prime Minister Gaston Browne has made it clear that Antigua and Barbuda will be the first to be repaid if a new LIAT does not work out.

It was announced in St. John’s last week that it’s almost certain now that the Antigua-based regional carrier will return to the skies, perhaps as early as next month.

“What the Cabinet has decided, while the Administrator is negotiating, we have decided that we will provide the funding so that the Administrator could continue to do LIAT’s work, but we think it would be important for us to support the Administrator putting LIAT back into the air,” Browne said.

“I know that there’s a plan that is being developed presently — it may take another 30 to 45 days to be completed — so as soon as we get that plan from the Administrator, the government of Antigua and Barbuda has committed to provide funding.

“In fact the funding that we are providing, we’re doing so as a preferred creditor, not as a shareholder. So, if things do not work out then the government of Antigua and Barbuda will be the first to be repaid. I want to make that abundantly clear.”

Browne’s administration had borrowed US$15 million to invest in LIAT and he said they have commenced utilizing some of those funds.

“We’ll make the funds available to assist the [Administrator] in his objective to try and get LIAT back in the air,” Browne said.

A downsized LIAT

Browne said the new LIAT will be a “downsized” entity, maybe with about four planes.

“Not the LIAT with 10 planes, because there isn’t sufficient demand, and it means too that the amount of people working for LIAT going forward will be significantly reduced,” he said.

“My understanding is that the Administrator will be terminating all existing contracts and will take on individuals under new contracts in order to operate the airline going forward. So, it will be a very lean and efficient entity and I have to say here that there is no way that we are going to waste taxpayers’ money to fund a bloated institution.”

Meanwhile, the Antiguan leader said approximately $70 million in debt will be eliminated from the balance sheet of LIAT as a result of debt write-off.

He said Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines have all agreed to write off debts owed to them by LIAT.

“There are some other creditors that the [Administrator Cleveland Seaforth] is trying to get to cooperate as well and he’s presently negotiating with them.”

Advertise with the mоѕt vіѕіtеd nеwѕ ѕіtе іn Antigua!
We offer fully customizable and flexible digital marketing packages.
Contact us at [email protected]

22 COMMENTS

  1. This is nothing but a well organized plan led by Gaston Browne and his Government to put LIAT back in the air without honoring its legal requirements to pay SEVERANCE! Note that Gaston Browne makes no reference whatsoever to severance payments. He is prepared to satisfy his ego of putting LIAT back in the air while putting 50O plus workers and their families to pasture without their hard earned severance. Wickedness and evil of its worst kind. However, those families and their families also vote…

  2. LIAT is important.So are the Pensioners of Antigua and Barbuda.Today is the 11th October,2020.They have not been paid their pensions for September,2020.They would all be voting in the next elections.LIAT would not be able to vote for anyone.

    • And the next election is some three year away. By that time things will surely be back to normal and we will look back to these unusual hard times of Covid and praise God that we have made it through these hard times. Which by the way are not to the making of anyone.
      So you keep dreaming about the coming election

      • From the Sidelines:You are all of self and none for anyone else.
        The Country was struggling financially before Covid-19.The Pensioners were being paid late before Covid-19.How would you know the election is 3 years away? Gaston Browne has the right to call the election as he sees fit. Remember,Gaston called an early
        election in 2018.Before the allotted 5 years came due.He could do it again.

  3. Yes Antigua and Barbuda should be the first to be repaid if LIAT does not work out, but I do not like the sound of that. What has become of the mantra “failure is not an option”. Why are we thinking of failure even before LIAT has taken to the skies. It was also stated that flights would commence sometime in November, however, it will take another 30 to 45 days for a the LIAT plan to be completed. Prior to that it was stated that LIAT would be flying within 60 to 90 days which time period ends at the end of October. I wonder what Dave “Beef” Joseph feels about the failure to meet that timeline. Going forward I hope the government is more realistic with its plans and timelines and that we can really see a positive future for the new LIAT.

    • What is it that you again don’t understand. The Government cannot set any timeline for LIAT. LIAT is run and controlled by an Administrator. The court gave him 120 days to come up with a plan to safe LIAT. The government is only wishing and hoping at this moment. If the Administrator comes tomorrow and says it cannot work than so be it. At least we have given it a shot, which the other shareholders were not willing to do. The PM has always said that if this LIAT has to be foldup he will start LIAT 2020. He now is willing to give the administrator extra monies in order to get the job done. And this extra money he will not put in as normal debt or as part of shareholder, it will be as a prefered creditor so that if things do not work out, we are the first to get back our money. Noting that the current shareholder were adamant not to put in one red cent into LIAT any longer. All you now are doing is trying to see if you can score any points about timelines that were set to have LIAT flying. The crucial part is we are not talking about liquidation any longer. We are talking about downsizing LIAT. And that is because of Covid. Cause if you remember the PM used to talk about making LIAT bigger to take on longer flights and get into the JET service. When it comes to inter-Caribbean air transport I have a complete different view. Lester Bird had said it long time ago. LIAT need to be treated like a essential service. And needs to be funded by the taxpayers of every Island from their taxes. Just like a bus service that has to service every every village in the country. If Barbuda doesn’t have a viable service either by air or sea the government has to make sure that it will be put in place. And it is been subsidize presently. If we talk about Caricom integration we must assist the smaller Islands that lack the numbers and the finance to afford such a service. Antigua has been a hub for the Eastern Caribbean for both air and sea. That is why WIOC was able to expand their storage in order to store oil for the neighbouring Islands. Therefore we can attract bigger oil tankers to bring larger shipment thereby reducing the shipping cost. The day will come that we will lay down pipes that will connect the neighbouring Islands. And the day should come that we lay a pipe line to Parham to the APC plant and then one to Barbuda. A bridge may be farfetched but a pipeline isn’t.

      • “From the sideline “ . You’re obviously of the same ilk as the PM. Lots of talk but not a single mention of employee severance!

        • I don’t know about the PM, but I have stated on many times that I think severance is a business killer and it is an employees wish. As the seeing goes, If wishing were horses beggars would ride. Nowhere in law companies are mandated to put monies aside for severance. Therefore to date many employees have been denied this benefit when a company closes its doors and goes bankrupt. The other day a section of Stanford workers receive the balance of their severance after struggling for more then 10 years. Some sadly died before they could reap these benefits. You have Half Moon Bay workers still waiting for theirs. So I say it frankly. What is the point of this severance if it cannot be enforced. A company will skillfully get rid of its assets when it knows things are going south and leave everyone holding an empty bag. Furthermore from an accounting perspective you can not accrue or provide for severance on your balance sheet. Banks can accrue for bad debt and non performing mortgages but that’s it. And when you have long serving employees that liability is real. So either we change the laws and let companies setup a funds for severance or we do away with it.
          I prefer to see the government introduce a better Pension Plan that is transferrable to any employee and that pays according to your last earned salary. People depending on a social security pension are living in poverty. And many that have reach retirement still have to remain employed somehow in order to maintain their standard of living. Most of the time they still have a mortgage or a child still in college. People in North America and Europe usually look forward to retirement cause they get up to 75% of their last earned salary for the rest their live and if they have a spouse that outlive them he/she will receive part or all of the pension until their death. We need to make retirement living more enjoyable. Perhaps we should call it a voluntary supplementary pension plan. This will then come in addition to the Social Security pension. Note however that retired civil servants are much better off than private sector workers. As they receive a none contributory government pension and a Social Security pension at retirement age.
          Although I have enough money set aside I have always paid my personal pension plan with Sagicor.
          So once again I’m not one for severance. You work and you get paid, that’s all. The company doesn’t owe you one thing. And don’t confuse this with wrongful dismission.

  4. LIAT flying again? Gaston Brown and Antiguans are dreaming. LIAT owes customers for tickets purchased but not honored. As far as customers are concerned LIAT is a diminished brand. Airlines lead by CAL have already positioned themselves to replace LIAT in the regional market. CAL has now established a presence in the region from Guyana to Jamaica, it is also an international airline and is owned by a caricom member state.

    • POINT taken and true who the hell browne think is going to fly on liat when still owed money I for one wouldn’t be and don’t even think about coming with vouchers the people want CASH it’s getting me sick and angry browne or the so called administrator not one in any of the article’s released mention the words TICKET HOLDERS being REFUNDED some of these politicians like they think all west Indian people foolish come on 11 million us dollars outstanding to the ticket holders and until this money is repaid it’s useless to think of putting LIAT back in the Air.

  5. FROM THE SIDELINE so if the Court gave the Administrator 120 days to put a plan in place for LIAT, why the hell then is the Prime Minister making announcements that LIAT will fly in 60 to 90 days. Why doesn’t he wait for the finalization of the plan? My dear Sir you’re the one who does not seem to understand. You need to think more and write less. Anyway, I have come to the conclusion that it is your blind acceptance of anything that comes from the Prime Minister’s mouth that makes your utterances so nonsensical.

    • Good question. Why is the PM making those statements. Perhaps he wants to inform us on the little hints he gets from the Administrator. Not that I agree with him running his mouth on it. But that is him. Sometimes I feel he is telling us too much. That is what got him in trouble at one point with Mia who is not so transparent to tell the public everything that she is negotiating. Sometimes it’s good to transparent and sometimes too much transparency can make others feel they cannot tell you things in confidence.

  6. FROM THE SIDELINE now we are on the same page for a change. Indeed the Prime Minister should give the Administrator of LIAT time to complete his exercise before making all kinds of statements.

    • You see you will still turn around and accuse me of always batting for the PM. I told you I am objective. I say it how I see it.
      But you on the other hand. Always criticizing whatever it is the PM does. Makes you therefore not objective.

  7. FROM THE SIDELINE the PM himself will tell you that I am very objective. It is just that many times ones does not want to hear the truth.t

    • What is it with you guys. You all brain always stop working?. The PM said if the company has to fold up then Antigua will be paid first. Because of the sale of the assets. He is ensuring that any dollar he puts in now he is doing so as preferred creditor. I hope you know what that means.

      • Perhaps you have forgotten, but LIAT has no assets. The three planes belong to the CDB and if they are sold we were told, based on their current value the revenue derived will not cover what LIAT owes to CDB. It means that if that happens the shareholder governments will have to find money to pay off the balance. Follow the story from the beginning not in the middle.

        • You know I took a long deep breath before responding to you. I mean if things were so simplistic I would say, yes you’re right LIAT doesn’t have any Asset. As the PM also made the point that the staff may not be getting their severance if LIAT had to liquidate. But surely he didn’t mean that LIAT doesn’t have any assets. I mean I have not seen their balance sheet in a while but I can image it has on it tangible and intangible asset. And especially the intangible asset are worth more then the tangible. Like landing rights. You know Sir Robin has a company that owns landing rights. The company doesn’t have one plane, but it does sell and lease out its landing rights. Big business for LIAT to get in. And selling landing rights is like selling the remaining lease or contract you have. Could be worth millions of dollars in some instances. I told you how Bob Johnson sold the TV rights and other right of his basketball team for $600 million. Wasn’t that an asset? I mean I will not take anymore time to educate you, but when you make statements such as above I really feel compelled to educate you and like minded like yours, which I must say you will only find in the UPP.

  9. If LIAT is so rich in assets, why are they so broke? Why are all the other shareholders giving up their shares and running from this asset rich company? Why is Gaston using loan/tax dollars instead selling some of LIAT assets. If what you say is true that LIAT has all these assets, why are they asking for debt forgiveness? Truth is known that the liabilities of LIAT far exceeds its assets.

    • I answered you yesterday but for some strange reason some of my comments are not posted lately. I’m watching to see what the issue is. Or I will stop contributing

Comments are closed.