A resolution has been authorized in the Parliament of Antigua and Barbuda, giving the St Johns government the authority to secure a loan of ECD $40 million to purchase additional shares in regional carrier, LIAT.
The loan will be sourced with Banco del ALBA.
Members of Parliament voted for the resolution on Tuesday, in a move to help save the struggling regional carrier.
Finance Minister, Gaston Browne anticipates that the changes will make LIAT more efficient and profitable but also warned that it would come with “cuts including reduction in salary and wages”.
” A condition of this new capital would be that there has to be cuts including a reduction in salary and wages,” he said.
Browne, who is also the Prime Minister of the twin-island state, also anticipates a shifting around and possible change in the directorship of LIAT.
“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,” Browne said.
He said sometime in September, as early as the 11th, he negotiated the loan to facilitate the acquisition of the additional funds.
It will be termed out over a period of ten years at six per cent per annum, with an annual repayment of about six million ECD about 2.2 million U.S. dollars a year.
$800,000 of the loan amount will be utilised to cover the transactional expenses at a percentage of two (2) per cent, as well as a one (1) per cent FFE contribution, which Browne explained is a contribution to the bank’s equity.
This loan amount will add to the USD $500,000 dollar contribution made by the government a week ago, and a similar amount made to the airline earlier this year.
In addition, the Antigua and Barbuda government will also be required to contribute to a social fund, which according to the prime minister, is a precedent condition when seeking funds from ALBA. The remaining the USD $15 million will be utilised to recapitalize LIAT.
Mr.Brown first you get rid of the entire Board,they are a waste,get some outside minds,and you will see a change in profit.
you all are mind boggled by mr Brown’s tactics, which is expected when crafty minds make decisions. too many cooks spoil the soup…and oh how i love soup. liat is victim of many tentacles orchestrating its demise. but what if one good cook prepared a splendid soup… oh how palatable it would be. he thinks outside the box…ill give him that!!!
Liat as I have been saying for sometime now has a management problem! Liat needs new management that will make the airline more successful.
Liat as I have been saying for sometime now is management problem! Liat needs new management that will make the airline more successful.
But Mr. Brown could easily get that amount from Ske6 interest free. Boy all Skerrit would do is just give Gaston Brown about 60 diplomatic passports to sell to known crooks And wanted criminals from the middle East and before you know it they would have all the money they need to save LIAT
Strange logic here. The Antiguan government, through its prime minister who is also the minister of finance, would note that LIAT has been draining money from investors throughout its history. He was himself involved in paying 500,000 dollars to LIAT earlier this year and in his wisdom, he makes two statements that is mindboggling (a) He is burrowing money to pump into a failing company which has a clear record of failure through the years and (b) He is hoping to motivate workers by reducing their wages, interesting, but exactly how does Mr Brown expect to repay the loan when he is investing in a failing company? Did he not learn from Dr. Skerritt or Sister Mia from Barbados, in her efforts to exercise fiscal responsibility by selling some of her shares in LIAT? Enquiring minds will be observing.
Not a good idea
Gaston, I can give you a loan at 5%. I can borrow from my bank at less than 3%.