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The Caribbean Development Bank has informed Antigua and Barbuda that the shareholders of LIAT 1974 LTD are responsible for determining how the proceeds from the sale of the aircraft will be used.
Two weeks ago, Prime Minister Gaston Browne sent a letter to the Chairman of the CDB, Isaac Solomon, explaining that Antigua and Barbuda had taken steps to purchase the aircraft of LIAT 1974 Ltd for a total of US$12.1 million.
Browne mentioned that these funds were intended to reduce the outstanding balances on LIAT 1974 Ltd’s re-fleeting loan, which was originally provided by the Caribbean Development Bank several years ago.
Browne reminded Solomon that the Caribbean Development Bank already had a secured position due to its sovereign debt nature and was still in good standing.
However, the additional lien on the planes prevented the use of the US$12.1 million to partially settle the severance payments for the former staff of LIAT 1974 Ltd.
Browne proposed a solution, suggesting that the CDB release the lien on the planes to free up the $12.1 million held in escrow to facilitate the severance payments for the former LIAT employees.
He also recommended that the CDB consider reducing the lien’s value to release approximately US$4 million for immediate use in the LIAT workers’ payments.
In response, the CDB stated through the media that when LIAT went into liquidation, the company’s shareholders, including the governments of Antigua and Barbuda, Barbados, Dominica, and St. Vincent and the Grenadines, agreed to sell LIAT’s three aircraft to the Government of Antigua and Barbuda.
An Aircraft Sale Agreement for the sale of the three aircraft, over which the CDB holds mortgages, has been executed between the Administrator for LIAT (1974) and the Government of Antigua and Barbuda.
The CDB clarified that they are not a party to the sale agreement but are only responsible for providing consent for the sale, which they have already done.
According to the CDB, under the agreed sale arrangement, the shareholder governments approved that the proceeds from the sale should be proportionately allocated to paying the outstanding balances on CDB loans initially made to support LIAT (1974) Limited’s operations.
The CDB emphasized that the decision regarding the use of the sale proceeds lies with the shareholder governments and clarified that they are not involved in the financing or any aspect of the operations of LIAT 2020.
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