LIAT (Antigua and Barbuda) (Antigua) hopes to exit judicial administration through the LIAT 2020 Ltd. newco by mid-2022 as negotiations gather momentum with potential investors, according to Antiguan Minister of State within the Ministry of Finance Lennox Weston.
Speaking on the Observer AM radio show recently, he said several Caribbean governments had indicated an interest in investing in the carrier, while discussions are also underway with potential private sector investors. “We have about three governments who have already indicated their desire to participate, and we are still in the final stages talking to two additional investors,” Weston said.
He pointed out that recruitment for the newco has begun. “We have earmarked LIAT 2020 to start to fly in June of this year,” Weston said but acknowledged: “We are still in the final stages of negotiations with potential investors. I want to say though that, based on our feasibility studies, if needs be, the Antiguan government can finance this airline by itself.”
“We have restructured LIAT without legacy issues into a very reliable airline that can pay for itself and where financing the airline is not even beyond the means of Antigua and Barbuda,” he was cited by the Antigua Observer.
Owned by seven Caribbean governments, LIAT (1974) Ltd. entered administration in July 2020 following increased debt and the impact of the COVID-19 pandemic. It has since been operating a reduced schedule using a fleet of three ATR42-600s (of which only one is currently active) and with a limited workforce. The airline owes creditors in excess of XCD100 million East Caribbean dollars (USD27 million).
Weston admitted that efforts to find an investor with deep pockets, willing to take on LIAT’s debts and start a new airline, had proven difficult. “Just the benefits for the workers alone is over USD120 million. When you add all the other taxes and all the other things owned by LIAT 1974 Ltd, it’s difficult to find an investor who would want to consume that upfront when you can start a new airline cheaper.”
“If Liat 1974 does not get that sort of level of investment, then it will be dissolved [...], and the benefits for the workers will be paid from the sale of the assets of LIAT 1974 Ltd,” Weston explained. He believed the wisest solution would be for staff to accept the government’s settlement offer comprising 50% of what they are owed. The government in December said it would provide XCD2 million (USD740,000) for a settlement deal.
