Bankrupt regional carrier LIAT owes the Government of St. Vincent and the Grenadines EC$12.2 million in airport service charges, landing and other fees, while the government has guaranteed EC$48.7 million on behalf of the airline.
As shareholder, the government owns 11% of the equity in LIAT, as creditor LIAT owes the government airport service charges, landing and other fees $12.2 million.
“The bulk of this relates to airport service charge,” Prime Minister Ralph Gonsalves, who was chair of LIAT’s shareholder government, told Parliament this month.
“They’ve invariably been behind and they will make payments and then they go behind again, you know in accordance with their cash flow. They owe every government in the region,” said Gonsalves, whose government owns 11% of LIAT.
Gonsalves was responding to a question from opposition lawmaker St. Clair Leacock, who is MP for Central Kingstown.
Leacock asked the prime minister to say what is the exposure of SVG; SVG’s total investment in LIAT between 2001 and 2020 and a breakdown of the investments; and LIAT’s current total assets and current total liabilities.
Leacock also wanted the prime minister to say what was the total amount outstanding for salaries & wages; vacation pay and severance settlement.
The opposition lawmaker further noted that while Barbados and SVG of the current shareholders have indicated they have no further interest or ability to invest in LIAT, if Gonsalves objects, in principle, to other CARICOM bodies investing and trading under the name LIAT.
The prime minister said that as of May 31, 2020, the total assets of LIAT was US$68 million; total liabilities, US$117.4 million, and the capital deficit US$49.4 million.
Outstanding salaries and wages between May and July was EC$7.2 million, Gonsalves said, adding, “Undoubtedly it’s more now. Yes, because people have continued to the current time.”
LIAT owed US$10 million in vacation pay, including US$400,000 to its workers in SVG.
In severance pay, the airline owed the 41 workers in SVG US$1.4 million, Antigua and Barbuda US$61.6 million for 372 workers; in Barbados 93 workers were owed US$15.1 million; in Grenada, 45 workers owed US$2.5 million, in St. Lucia 37, workers owed US$1.3 million; in Trinidad, eight workers owed US$700,000; in Dominica, 30 workers owed half a million dollars; in Martinique, two workers owed US$200,000; in Guyana, four workers owed US$100,000; in Guadeloupe one worker owed US$200,000; in Puerto Rico, three workers owed US$300,000.
“You would see some variations there but obviously one of the matrices, which you would not have, would be the average number of years of service. You take for instance, in Grenada, Grenada has 45 workers and they are to $2.5 million; St. Vincent is 41 workers, but only $1.4 million. The difference is that the average years of service in St. Vincent is 12 years, whereas 19 years in Grenada, I just want to give an example in respect of the matrix…” the prime minister said.
Gonsalves said that as guarantor and financier, the government has borrowed and guaranteed, on behalf of LIAT, various times the equivalent of $48.7 million from the Caribbean Development Bank.
“And also there was one loan which had been borrowed from the government of Trinidad and Tobago –a facility which had been provided during the Patrick Manning period. The monies are basically these: fleet modernization EC$16.27 million; support for LIAT, EC$11.1; support for LIAT, EC$3.7 million, emergency support loan 2.8 million,” Gonsalves said.
He said a total of $16.2 million have already been repaid on the CDB loans.
“I should point out in relation to the fleet modernisation, that loan was being paid by LIAT until about three or so years ago when the governments, as part of trying to put LIAT’s financing on a footing, we all agreed, the shareholders, to make the payments to the CDB on the loans LIAT took but which we guaranteed.”
Gonsalves said there is a balance of approximately $21 million remaining on the CDB loans.
“There was a small one in relation to Trinidad and Tobago,” Gonsalves said.
He said that regarding the fleet modernisation loan, there are three planes in which SVG owns 11%.
“So when you’re selling the planes now, we will recoup something or if they leased.”
He said the planes have been valued at $10 million each “but that’s a value which needs to be properly interrogated because in the current climate, you’re probably not going to get that”.
Gonsalves said that SVG, Barbados and Dominica, the other shareholder government, have written to the Caribbean Development Bank, indicating that they have no interest in further investing in LIAT
“Antigua, because clearly it would be in their interest if they’re having a new airline or reformed LIAT, whether it is LIAT 1974 or LIAT 2020. We are not doing that. But we will see what happens if they want to start with those three and at what terms they get them,” Gonsalves said.
Leacock asked the prime minister if he was giving undertaking that under no circumstances would SVG be investing in LIAT again.
“That’s what you’re saying?” Leacock said.
“No, I’m not saying that. All I’m saying in this regard, I’m not looking forward to the past in relation to where LIAT is.