More Dealing and Wheeling in LIAT Takeover Negotiations

Antigua and Barbuda's effort to acquire majority ownership of LIAT through a purchase option of Barbados shareholdings sets the stage for 'the art of the deal' taking into consideration intra-regional travel, and its economic consequences in the wider Caribbean.

Barbados is LIAT's majority shareholder at 49.5 percent, currently undergoing an International Monetary Fund (IMF) four-year Extended Fund Facility (EFF) is not in a financial position to support LIAT and/ or facilitate its expansion.

Antigua and Barbuda has 34 percent, St Vincent and the Grenadines, Dominica, other Caribbean governments, private shareholders and employees holding minimal interest.

Restructuring plans have come and gone, debt refinancing much talked about and recently strategic options, to which Antigua and Barbuda is prepared to lead.

David Jessop wrote in his column, The view from Europe: The pivotal role of aviation in regional integration, 'Whether LIAT has an assured future remains to be seen, but for as long as politicians fail to satisfactorily address inter-regional connectivity and its cost, Caribbean integration will for most remain illusory.

Negotiations on the sale of LIAT continues albeit manoeuvres and 'the art of the deal' and/ or trading that is playing out. Still, it would be odd if in this negotiation cycle there isn't power plays. In such a scenario, the initial discussion is to get a feel of where both side stand and most often, the powerplay.

Experts contend Antigua and Barbuda accomplished that fate while putting the extended burden on Barbados negotiation team led by attorney general Dale Marshall includes minister for tourism Kerrie Symmonds and director of finance and economic affairs, Ian Carrington.

The sticking points to Barbados selling its 49.4 percent majority stake in LIAT is reportedly prime minister Mia Mottley's insistence that Antigua and Barbuda would have to take up Barbados' almost $100 million loan commitments from the Caribbean Development Bank (CDB) which was used to purchase three LIAT aircrafts.

Barbados also has concerns relevant to staffing levels and flight routes, accounted for five of the six profitable routes traveled by LIAT flying 15 destinations across the network.

Antigua and Barbuda's desire to have controlling interest is LIAT would certainly draught other shareholders Dominica, St Vincent and the Grenadines and Grenada, however, none have come forward with a strategic option to counter and really trying to find a more even approach to the financing of LIAT.

Prime Minister of Dominica Roosevelt Skerrit has stated that the regional private sector and other stakeholders should consider ownership interest in LIAT and the continued development of the region.

The ‘imminent collapse' of LIAT and any move to recreate its replacement is more disruptive that most will admit, hitherto, current majority shareholder Barbados debt obligation will worsen, and Antigua and Barbuda's 700 employees will take a direct hit, including regional travel and regional socio-economic setbacks.

Therefore, experts contend, while it appears that negotiations are twisted, it is the natural course of events weighing out the options, as well as producing a 'counter offer' knowing all too well the greater ambition 'the art of the deal' is negotiate the best agreement possible.

Source: MENAFN