Antigua first to be repaid if new LIAT does not work out

Antigua Breaking News (ABN) – Prime Minister Gaston Browne has made it clear that Antigua and Barbuda will be the first to be repaid if a new LIAT does not work out.

It was announced in St. John’s last week that it’s almost certain now that the Antigua-based regional carrier will return to the skies, perhaps as early as next month.

“What the Cabinet has decided, while the Administrator is negotiating, we have decided that we will provide the funding so that the Administrator could continue to do LIAT’s work, but we think it would be important for us to support the Administrator putting LIAT back into the air,” Browne said.

“I know that there’s a plan that is being developed presently — it may take another 30 to 45 days to be completed — so as soon as we get that plan from the Administrator, the government of Antigua and Barbuda has committed to provide funding.

“In fact the funding that we are providing, we’re doing so as a preferred creditor, not as a shareholder. So, if things do not work out then the government of Antigua and Barbuda will be the first to be repaid. I want to make that abundantly clear.”

Browne’s administration had borrowed US$15 million to invest in LIAT and he said they have commenced utilizing some of those funds.

“We’ll make the funds available to assist the [Administrator] in his objective to try and get LIAT back in the air,” Browne said.

A downsized LIAT

Browne said the new LIAT will be a “downsized” entity, maybe with about four planes.

“Not the LIAT with 10 planes, because there isn’t sufficient demand, and it means too that the amount of people working for LIAT going forward will be significantly reduced,” he said.

“My understanding is that the Administrator will be terminating all existing contracts and will take on individuals under new contracts in order to operate the airline going forward. So, it will be a very lean and efficient entity and I have to say here that there is no way that we are going to waste taxpayers’ money to fund a bloated institution.

“If the plan does not fit into our objectives of having an efficient, right-sized LIAT then clearly we’ll have a problem. And I have to say here too that if we’re unable to get a lean LIAT then we’ll have to collapse it,” Browne added.

Meanwhile, the Antiguan leader said approximately $70 million in debt will be eliminated from the balance sheet of LIAT as a result of debt write-off.

He said Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines have all agreed to write off debts owed to them by LIAT.

“There are some other creditors that the [Administrator Cleveland Seaforth] is trying to get to cooperate as well and he’s presently negotiating with them.”