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(DOMINICA NEWS ONLINE) — A resolution has been authorized in the Parliament of Antigua and Barbuda, giving the St Johns government the authority to secure a loan of ECD $40 million to purchase additional shares in regional carrier, LIAT.
The loan will be sourced with Banco del ALBA.
Members of Parliament voted for the resolution on Tuesday, in a move to help save the struggling regional carrier.
Finance Minister, Gaston Browne anticipates that the changes will make LIAT more efficient and profitable but also warned that it would come with “cuts including reduction in salary and wages”.
” A condition of this new capital would be that there has to be cuts including a reduction in salary and wages,” he said.
Browne, who is also the Prime Minister of the twin-island state, also anticipates a shifting around and possible change in the directorship of LIAT.
“I’m pretty sure that there’ll be some changes even with the directorship of LIAT. We have to make sure that we have a cadre of competent people and we may even create the space for members in the private sector as well to participate,” Browne said.
He said sometime in September, as early as the 11th, he negotiated the loan to facilitate the acquisition of the additional funds.
It will be termed out over a period of ten years at six per cent per annum, with an annual repayment of about six million ECD about 2.2 million U.S. dollars a year.
$800,000 of the loan amount will be utilised to cover the transactional expenses at a percentage of two (2) per cent, as well as a one (1) per cent FFE contribution, which Browne explained is a contribution to the bank’s equity.
This loan amount will add to the USD $500,000 dollar contribution made by the government a week ago, and a similar amount made to the airline earlier this year.
In addition, the Antigua and Barbuda government will also be required to contribute to a social fund, which according to the prime minister, is a precedent condition when seeking funds from ALBA. The remaining the USD $15 million will be utilised to recapitalize LIAT.