Government Plans To Take $40 Million Loan To Purchase Additional Shares In LIAT

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In the Government’s pursuit of gaining majority of shares in LIAT, it was agreed and approved to secure a loan of approximately EC $40 million with Banco del ALBA to purchase additional shares.

On Tuesday October, 29th, 2019, Speaker of the House, Sir Gerald Watt QC authorized the resolution and Members of Parliament (MPs) voted for the resolution, which is expected to yet again recapitalize the failing airline.

According to Prime Minister, Gaston Browne, the changes will make LIAT more efficient and profitable however reduction in salary and wages would be a consequence.

“A condition of this new capital would be that there has to be cuts including a reduction in salary and wages…I’m pretty sure that there’ll be some changes even with the directorship of LIAT. We have to make sure that we have a cadre of competent people and we may even create the space for members in the private sector as well to participate,” said Browne.

Browne says $800,000 of the loan amount will be utilised to cover “the transactional expenses at a percentage of 2 per cent, as well as a 1 per cent FFE contribution”, which he explained is a “contribution to the bank’s equity”.

Also the government will be required to contribute to a social fund as is customary when seeking funds from ALBA. The remainder will be utilized to recapitalize LIAT.

In response to the Opposition MPs’ concerns of investing large amount of money into a failing airline, PM Browne rebutted, saying, “the intention is not to have these funds wasted, but to make sure that they are properly invested.”

“So, the programme calls for recapitalisation with a simultaneous restructuring of LIAT. So, we’ll be focusing on reducing expenses while at the same time increasing revenue,” he replied.

Browne says he hopes that the other shareholder governments will bring the total anticipated contributions to the airline, to about US $30-35 million.

 

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11 COMMENTS

    • LIAT is not party to the loan agreement of the government and the ALBA Bank. But it could be that the government gives the ALBA Bank the shares as collateral. In that case the ALBA Bank will own the shares that the government purchase. Similar to you taking loan to buy a car and the sign over the papers to the bank until you payoff that loan.

  1. How much money are we as a country going to borrow?We would be indebted up to and including our eyeballs.This country would be indebted to all and sundry.Giving the Port to Global Ports for thirty years.Giving Royal Caribbean Fort James.Is Antigua the new Soweto?Are we bringing back the days of the WHITE MAN AS OUR MASSAS?And I thought Massa days were done.Browne hopes other shareholders would bring the anticipated contributions to the airline.Laughter is the best medicine.Because in my opinion Leaving Islands Any Time is not an Airline.It is a bottomless money Pit.Like dumping your money onto a latrine hole.

    • I guess you never flew on that latrine hole.
      Sad enough it is our pride in the skies. And has been for over seventy years now. Many airlines have not survive such a long time in the sky.

  2. WOKE AND BLACK-MAN
    You Guys never ceased to amaze me. What the Hell this Administration can do to appease you Guys ? You Guys view EVERYTHING as politics. Wake up and see what the Prime Minister is doing and take Politics out of the Equation. God Bless Hon. Gaston Browne.

    • Johnny Harris:God blesses all of us.Even those that we called thieves and robbers.Read my discourse and tell where do you smell politics. LIAT as we have known it has been a bottomless money pit.No amount of money is going to change the course for LIAT.It would take a purging at LIAT to get it on its right tracks.Getting rid of all Governments Ministers from LIAT’s Board would be a good place to start.Let LIAT be run by smart Caribbean persons with a background in the Airline Industry.Once you have Governments interference in any businesses it would run amok.Look at all the local projects and costs overruns in Antigua and Barbuda.Has anyone been arrested for such Bobol and corruption in Antigua.A resounding NO is the answer.

  3. Interesting! It seems the elephant in the room is not being addressed…

    Address the statement: the changes will make LIAT more efficient and profitable “HOWEVER reduction in salary and wages would be a consequence.” and again below “A condition of this new capital would be that there has to be cuts including a reduction in salary and wages…

    I wonder as I wander..How are the employees going to feel about this? But I guess they don’t count right?

    • Even if they do count. The pill has to be taken. And the staff if very much aware of what needs to be done. You just cannot continue on the same path. Would be like taking water to the sea. or trying to wipe the sea dry. Many Pilots and others some ten years ago already took their package and left. Most went to fly for India and other are in several African countries where they have the Dash 8 planes.

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