Friday 14 August, 2020

PM Gonsalves: LIAT liquidation unanimously agreed to last month

At the June 27 meeting on LIAT with the major shareholder governments, it was unanimously agreed there would be liquidation of the airline.  

St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves stated this during a local radio programme on July 7.  

He addressed once more the situation which has led up to the current dilemma facing LIAT.  

Dr Gonsalves said the meeting was called on June 27 to deal with four matters on the agenda.  

A resolution was received from the Board of Directors of LIAT with a detailed report on the financial condition of the airline, with the resolution stating LIAT cannot pay its debts and a recommendation for winding up.  

Dr Gonsalves said: “I am the Chairman of the Shareholders. I get something like that I have to act. I’m duty-bound to act and there was an agenda for the meeting.”  

The agenda included receiving the report on LIAT’s financial condition, recommendations from the Board of Directors, winding up/liquidation and any decision to call an ordinary shareholder meeting with creditors there to deal with the issue to give consideration to liquidation under the laws of Antigua and Barbuda.  

The Vincentian PM said the agenda was circulated and the first thing he did was ask for the agenda to be adopted and it was unanimously adopted.  

He said: “At the meeting, it was unanimously agreed there would be liquidation and the major shareholder Barbados would submit to us the name or names of a liquidator with the terms and conditions.   

We also agreed the by-law/regulations of the company would have to be amended as an ordinary shareholders meeting is normally held physically in the location where the company is headquartered.  

We have to because of COVID-19, make an amendment to the rules to meet virtually.  

Those were decisions taken unanimously.” 

Dr Gonsalves who recently took over as  CARICOM Chairman maintained that since day one he has been a strong supporter of LIAT.  

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However, he noted there are a lot of factors that have made it difficult for the regional airline.  

Dr Gonsalves said: “I hear people saying politician's involvement. I never got involved in the political direction in relation to LIAT. 

There were structural issues, legacy issues and I could detail them at some time.” 

The St Vincent and the Grenadines Prime Minister said there were losses and there are various reasons, but the losses from 2017 were just too unmanageable.  

He explained: “The arithmetic in 2017 with the two Category five storms and other hurricanes, it was a loss of 40 something million, in 2018, 30 million dollars, a recovery of sorts of 14 million in 2019 and up to May this year, 35 million because of COVID. 

The math was not there.  

The air of inevitably of liquidation became more realistic.”  

He said neither the governments of Barbados, Dominica, Antigua or St Vincent and the Grenadines said it had the money to step up to the plate.  

Dr Gonsalves said it is understood they are faced with two options either an orderly liquidation or a disorderly liquidation.  

He noted a letter was sent to him by Antigua and Barbuda Prime Minister Gaston Browne, to which he has responded.  

Dr Gonsalves disclosed PM Browne has asked for a meeting of the major shareholder government on July 13.  

This is in order to discuss and present on the reorganisation for LIAT as an alternative for liquidation.  

The Vincentian PM said he has no problem listening to PM Browne if he has a workable plan with realistic financing.  

However, he said while discussions are happening, as PM of St Vincent and the Grenadines, he must make sure and look for airlift.  

Dr Gonsalves also addressed other comments with respect to LIAT: “In relation to a number of matters people want me to speak about, I speak a general principle that the government of St Vincent and the Grenadines is not a bandit government.  

There are certain things we are not going to within right reason walk away from not exercising reasonableness, including reasonableness towards the taxpayers of St Vincent and the Grenadines.”  

 

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