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 re-organise 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 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 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.