Mid-flight 180: Antigua no longer to purchase cash strapped LIAT

In what appears to be a complete 180 degree turn, Antigua and Barbuda’s Prime Minister has squashed plans to purchase Barbados shares in cash strapped LIAT.

Instead, Gatson Browne said he will make a direct investment.

He said over the weekend that he has told Prime Minister Mia Mottley that Antigua and Barbuda has found $40 million to pump into LIAT and no longer wants to buy Barbados’ shares.

According to Browne, the money is to come from a loan from the Venezuela-based ALBA Bank.

 “I have indicated that the Antigua and Barbuda government has $40 million that could be made available to capitalise LIAT and that there should be a fresh capital call in which we will have the existing shareholders and possibly new shareholders recapitalise LIAT.” He said.

This according to him will be followed by a restructuring of LIAT to ensure that it becomes a little leaner and to ensure that it can at least make an operating profit going forward.

He said while there will have further discussions the idea that we will purchase Barbados’s shares, that is no longer on the table.

He said however that this would have to be approved by LIAT’s other shareholders.

There was an attempt by the Government of Barbados to liquidate some of its equity in LIAT and the Government of Antigua and Barbuda has expressed some interest in stepping into that breach.

But what Barbados asked for, was something that Antigua deemed an inappropriate value and the negotiations stalled.

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22 Comments

  1. malick
    October 11, 2019

    @Malatette

    How can Gaston Brown increase Antigua’s share holding in LIAT if he does not buy more shares? Can you elaborate a bit on this?

  2. ArAb
    October 10, 2019

    Pumping money into LIAT will not fix anything. They need to restructure, do some change management and have a sustainability plan that will yield profit and not ask Governments for bail out.

  3. bimjim
    October 10, 2019

    At the root of all of this, what is LIAT really worth to the shareholders? If Barbados wanted US$44 million for almost 50% of the shares, that translates to approximately US$1 million per point, or just US$100 million – coincidentally, just about what they paid (one way or another) for the new ATR fleet. Which suggests that the entire rest of LIAT – hangars, real estate, offices, furniture, everything – is worth diddly squat to the shareholders.

    Comrade Ralphie will never agree to sell LIAT, several of the shareholders can no longer afford to support the airline financially, and now seriously cash-strapped Barbados are so greedy they make it impossible for Antigua to buy their shares.

    Which brings us to Antigua pumping US$40 million into the airline – what would the resulting share percentage be if nobody else matches it? With the added funds, the new baseline would be US$140 million, Antigua would now have 34% + $40 million, translating to a calculation of 74 / 140 x 100 = 52…

    • Malatete
      October 11, 2019

      As far as I know LIAT operates 10 ATR aircraft, 5 ATR72-600 and 5 ATR42-600. Two of the latter are owned with the remainder leased. U.S.40 million would barely cover the purcase price of two of the smaller ATR42 ‘s. With so few assets and a mountain of debt I suspect the company is technically banktupt.

  4. Kalinago Justice
    October 9, 2019

    :?: Antigua is really the island to spend/waste money on lie-at, cause it’s in their interest!!!

  5. losting1
    October 9, 2019

    Stop dumping good money after bad?
    Governments around the Caribbean own liat and yet liat taxes are move expensive than the tickets it self. You can dumb how much money after liat you want, but when its almost impossible to fly from Anguilla to next door Antigua nothing will change.. Deal with liat prices and trust me the rest will come

  6. Annon
    October 9, 2019

    Venezuela has no money to lend. Very strange bedfellows.

    • DA2DBONE
      October 9, 2019

      It’s not a Venezuelan bank. It’s headquarters is based there. It’s a development bank formed by the members of ALBA.

      • Me
        October 11, 2019

        Pull the other leg my friend. AlbaBank is a communist bank if that is not a contradiction in terms.

  7. RasB
    October 9, 2019

    Liat continues to suck the coffers of these small island states. Almost every five years we hear of more and more cash being pumped into LIAT and yet it continues to fail. Is this an issue with the immediate managers? It does not seem so, since the issue is recurrent. What of the shear holders, could they be culpable? Is it a problem with vision? The appropriate response seems evasive.
    Can somebody please help? Has any feasibility study been conducted on the profitability of running an airline like LIAT in this part of the world?

    Let’s face it, there is something we do not understand or we continue to do wrongly. Look at the number of similar airlines which have come and gone. LIAT remains standing but is on crutches.

    A more creative strategy is required to ensure that LIAT trims fat and start functioning at a profit because we do need the service. It seems that is the way we do business, just like CITP still depending on handouts after 14 years. It seems we like it so say…

    • viewsexpressed
      October 10, 2019

      Mr RasB, the question is: Why is LIAT, every year seems to be under some level of financial stress that states have to inject cash on them annually?
      Can someone close to this issue please advise us ASAP, because we know that the islands own LIAT and pump money into it, not sure how often. Is it Quarterly, Mid year or annually? LIAT flies all the way from Guyana, south, all the way up North beyond the US and British Virgin Islands (USVI & BVI).
      What on earth is the matter with us? Are our CARICOM leaders that far behind in solidarity and comradery? We have some Prime (Odd) Ministers in the Caribbean with no vision, nor well designed plan as yo where we as a Caribbean nation are headed to. We need, resources, money, decency in politics, resources that we are in a position to address eventualities. We have a bunch of incompetent, weak, illiterate Prime Ministers not known bigger picture of socio-economic development. Get rid of failed Skerrit of Dominica. He has failed. Skerrit must Go.

  8. Bwa-Banday
    October 9, 2019

    “Si zandoli teay bon e partaykay westay ehlaire bycard!” After all the hoopla by Gaston Brown I see ne longer wants LIAT :mrgreen: :mrgreen: :mrgreen: . How many times we must say putting more money into LIAT without additionally forgiving ALL its debts, and totalling overhauling the airline will result in the same darn thing. Is like giving Dominica 10 Billion dollars and leaving Skerrit as the minister of finance or PM.

    Simply put, let LAIT die and form a new airline or have others do it. Remember BWIA? Now we have Caribbean Airlines doing better……hopefully it continues. Just too much bobol in caribbean airline travel.

  9. I fed up
    October 9, 2019

    We have to take what we get. No International airport.Where is our International Airport? 8-O Five more years of what? This same nonsense? Foh

  10. zandoli
    October 9, 2019

    If LIAT could not turn a profit when the price of fuel was low and they had brand new aircrafts, which required less maintenance, how then does Mr. Browne plan to turn this dinosaur around?

  11. %
    October 9, 2019

    1.291 billion dollars unaccounted for .in Dominica.
    Guess they will approach Dominica’s false God, Skerrit..
    He is so easily fooled, one has to wonder if he was born on April Fool’s Day .
    Just put cake and a knife in front of him!!! Remember Macau, with Lapseng, Ash, Lorenzo, etc.
    Liat has not served the region well .We need competition.
    Whey is di money?
    Whey is di money?
    Whey is di money?

    • Enough
      October 12, 2019

      Shut up already. We bored. Who is the bag yielding man? What’s in the bag? Deny him thrice! There was never a $1.2 billion. Grow up, prove it or bail out!

  12. Malatete
    October 9, 2019

    A loan from the Alba bank to help capitalise LIAT? Why would Antigua burden themselves with a third party loan if their coffers are bulging with CBI receipts? Unless of course the interest rate is very attractive. But even then Antigua would require the approval of the majority of the other shareholders because the net effect would be to dilute the share capital and lower the share price. I think it would be more acceptable if such an injection were used to write down some of LIAT’s considerable debt but I doubt this is Gaston Browne’s intention it being more likely that he wants to increase his country’ shareholding but not by buying stock from Barbados at their asking price. Could be a smart move if it succeeds.

    • zandoli
      October 10, 2019

      How do you write down debt with more debit? All you are doing is shifting debt from one creditor to the next. There could be a benefit if the interest rate is lower, but the debt remains the same. The burden could be lower.

    • Anonymous
      October 12, 2019

      Gaston Browne will never be able to outsmart a Bajan leader . He can turn 180 or 360 degrees in the shade. Even when the ridiculous little dictator moustache turns grey its not going to happen.

  13. Channel 1
    October 9, 2019

    Please note how Antigua over the years resisted all covert and overt attempts by Barbados to take control of LIAT and move LIAT’s headquarters from Antigua to Barbados.

    Meanwhile, in a country called Dominica led by absolutely incompetent individual, an entity birthed in Dominica and grown in Dominica over 40 years was allowed to pack up and move to Barbados just like that under the watch of dat absolutely incompetent individual. As a matter of fact, dat absolutely incompetent individual even made verbal threats to take Ross to court so they could move out faster when it appeared they were ‘stalling’ in the move to Barbados.

    Laaaabbbbbbbbbboooooooooourrrrrrrrrrrrrrrrrrrr……………

    Laaaaaaaabbbbbbbbbooooooooooouuuuuuuuuurrrrrrrrrrr…………..

    Laaaaabbbbbbbbbboooooooooouuuuuuuuuurrrrrrrrrrrrrr……………………….

    • Eddy A
      October 10, 2019

      Welcome to the fools paradise called Dominica…

    • %
      October 10, 2019

      That individual is called false God Skerrit!
      Just put cake in front of him,and you can manipulate the puppet to your will!
      Whey is di money?
      Whey is di money?
      Whey is di money!

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