PM Browne claims consensus with heads on LIAT restructuring, but admits that liquidation is not off the table yet

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(REAL News)

Consensus on the future of the LIAT has reportedly been reached, following the July 20 meeting between Prime Minister Gaston Browne and the other heads of the shareholder governments; but the spectre of liquidation remains.

Browne presented a plan to restructure the airline – as an alternative to the liquidation agreed upon earlier by the Board of Directors – and says the virtual meeting went well and members were respectful.

According to an article on the Caribbean News Service (CNS), the agreement between the heads would see LIAT back in the skies in 60 to 90 days.

“…We came to the consensus that we should sell the three planes that are owned by LIAT and charged to the Caribbean Development Bank (CDB),” Browne says in the article. “Proceeds will be utilized to pay down the loan, even though there would be a residual value.”

However, that course of action is still speculative since there is no guarantee of a buyer. In that case, Browne told an Observer Radio audience Tuesday morning, the company will lease the aircraft from the CDB.

Regarding how workers’ severance will be paid, Browne neatly sidesteps the question. Instead, he says that severance will need to be cut by 50 per cent in order for the restructuring plan to work, and that debts due to other creditors need to be slashed, as well.

Meanwhile, Browne says that Antigua and Barbuda will be submitting three candidates for the position of administrator of LIAT’s affairs. These include Cleveland Seaforth of BDO and Wilbur Harrigan of PKF Chartered Accountants and Business Advisers.

The administrator will have to present the Government’s reorganization plan to the Court in a matter of weeks, the Prime Minister says.

But “if the administrator fails to get the haircut from the various creditors, then LIAT will still be faced with liquidation; so the company is not out of the woods as yet,” Browne admits.

In the meantime, two shareholder governments – Barbados and St. Vincent & the Grenadines – have agreed to transfer their shares in LIAT to Antigua and Barbuda for the nominal sum of $1 each.

Browne commended that move, saying, “The aggregate shares that would be transferred … would be around 60 per cent between the two governments and therefore is a responsible proposition.”

While they are divesting their interests in LIAT, however, Barbados and St. Vincent, along with Grenada, are busy with alternative air-travel arrangements for their countries.

Caribbean Airlines Ltd. (CAL) has confirmed that it will be expanding its business to include flights between the Eastern Caribbean States, with Barbados as its hub. To this end, it says that, pre-COVID, it invested in additional aircraft and cabin crew to facilitate these new routes as part of its 2020 strategic plans.

The carrier is now awaiting regulatory approval for launching its regional service on July 22.

Interestingly, with all the movement by CAL and smaller carriers in the Eastern Caribbean, there has been no mention of service into Antigua & Barbuda, one residents points out to REAL News.

“What happened to us here?” she asks. “We don’t want to go nowhere?”