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ANTIGUA | Browne seeks CDB Loan to purchase LIAT aircraft

ST. JOHNS, Antigua, August 4, 2020 - As Prime Minister Gaston Browne continues to implements his plan to save the regional airline LIAT by reorganizing its finances and making arrangements with its creditors, the government of Antigua and Barbuda has approached the Caribbean Development Bank for a loan to purchase two aircraft to bolster the airline’s fleet.

The aircraft Browne wants to purchase, are presently part of LIAT’s fleet, are to be sold to reduce the liabilities of the airline. LIAT’s three largest shareholders including Antigua own the planes, and were purchased with a loan from the CDB.

“The Prime Minister of Barbados Mia Mottley and Prime Minister Ralph Gonsalves of St. Vincent and the Grenadines, said they would have written to the Caribbean Development Bank requesting that they sell the three planes and to apply the proceeds, on a proportional basis, in reducing their re-fleeting loan with the Caribbean Development Bank,” Prime Minister Browne has revealed.

Browne however pointed out that the “Caribbean Development Bank has indicated that in order for them to do that, they will have to call the re-fleeting loan; and because there are certain cross guarantees as well, it means that the other LIAT loans as well, they will be in cross default and they would have to call those.”

He lamented that this would create a fundamental problem for all three shareholding governments, and “In the case of Antigua and Barbuda, it would mean that we would have to find about US$25 million, which clearly we don’t have,” Browne said.

“We have since written to the Caribbean Development Bank to ask them if they could look at the possibility of extending a certain amount of money to Antigua and Barbuda so that we can payout St Vincent and the Grenadines and Barbados for the two planes that they would have owned out of the three.

In the meantime, he said, discussions are taking place with other prospective shareholders despite the fact that the airline industry is among the hardest hit globally and its recovery could be protracted.

“In the case of LIAT, our projections are based on about 50 per cent of the revenue of 2019, and even if it goes down slightly, I still think we can break even. But again, LIAT is so important to the economy of Antigua and Barbuda that we have to go the extra mile to salvage it.

“Within 90 days, which is the estimated timeline for getting LIAT back into the air, we believe by then all of the countries within the Caribbean would have reopened their borders and we will have more people flying,” Browne said.

  • Countries: Antigua_Barbuda