BASSETERRE, St. Kitts – BARBADOS Prime Minister Mia Mottley confirmed on Tuesday (Jun. 4) that her Government has opened dialogue with its counterpart in Antigua and Barbuda on the sale of its shares in the cash strapped LIAT.
Antigua and Barbuda’s Prime Minister, Gaston Browne had indicated in May that his Government was making headways in acquiring all but 10 percent of the 49 percent shares Barbados own in the airline.
Speaking in the National Assembly in Barbados, PM Mottley noted that following a discussion within Cabinet, the Government made a determination to take a back seat in the airline.
“We have accepted an offer from a sister Caribbean state, Antigua and Barbuda, to re-enter into negotiations with them to see whether a deal could be concluded with respect to Antigua and Barbuda taking up our shares in exchange for them taking up our responsibilities as a shareholder within the context of LIAT.
“…the Government of Barbados will establish a negotiating team that will meet with his negotiating team to settle the terms, if we can, with respect to the conclusion of the transfer of the shareholding.”
While the back-seat approach by Mottley and Bridgetown comes at a time when the country is restructuring, the PM noted that the she is still committed to a region airline.
“This would require negotiations on the part of both countries and therefore we will be writing Prime Minister Browne to indicate that just as he has established a negotiating team, the Government of Barbados will establish a negotiating team that will meet with his negotiating team to settle the terms, if we can, with respect to the conclusion of the transfer of the shareholding.”
The proposed sale of the shares comes at a time when the airline is in dire need of a financial injection, after shareholder governments confirmed that the regional entity is cash strapped.
In fact, they are seeking to raise US$5M to keep the airline flying.
To do that, the shareholder governments have asked for a minimum revenue guarantee from the major markets that the airline operates, including St. Kitts and Nevis.
Just recently, a statement from the Prime Minister’s Press Secretary in St. Kitts and Nevis indicated that the Federation would be putting $1M into the Antigua-based company as part of a Minimum Revenue Guarantee (MRG) arrangement with the airline.
PM Mottley confirmed that Barbados would also enter into a MRG arrangement with the airline.
“I want to make it clear, absolutely clear, that the Government of Barbados is not turning its back on LIAT. Indeed we continue to be committed to LIAT and will (1) maintain a minimum shareholding in LIAT should we reach an agreement…(2) that we will provide a minimum revenue guarantee on any route that is uncommercial, unprofitable: recognising however, recognising that the routes Barbados is involved in are in fact profitable,” the Prime Minister noted.