LIAT Looking For EC$25 Million Barbados Nation News - Thursday 27, February-2003 By Wendy Burke LIAT needs an EC$25 million cash injection urgently to meet its immediate financial obligations. Should it fail to raise the cash, it faces possible repossession of at least two planes. In light of the airline's financial challenges, managers have agreed to take a ten per cent salary cut, starting next month, while pilots voted yesterday on the issue. Results of that vote were not known up to press time. Engineers are also in discussion on a possible pay reduction. Operating costs have already been reduced by 25 per cent and staff by 35 per cent. This latest move would mean a saving of EC$30 million over the next six months for LIAT. The matter has already been discussed with regional unions, officials said. At a Press conference yesterday, chief executive officer Gary Cullen told journalists from Grenada, St Vincent and Barbados, that the overall equity needs of the airline were US$25 million (BDS$50 million). He said this situation was one of contradiction, with the operations position being sound, after capturing the lion's share of the intra-Caribbean market within the last four months, while capitalisation was suffering. Director of corporate development, David Stuart, said six out of ten Caribbean travellers were opting to fly LIAT. As to how the cash flow situation would be enhanced, Cullen said no one was stepping forward to inject funds, and especially not the regional government shareholders. They were offering assistance but not cash-in-hand. "It is partly a miracle, partly the grace of God, and partly the overwhelming support which the people of the region have for LIAT that kept the company in business. Management suffered through until the end of 1999," said Cullen. He added that an EC$4 million loan by Antigua to meet the payroll in 1999 was converted to equity. "This took the loan off the books but it gave us no more cash." The CEO praised the efforts of St Vincent and the Grenadines Prime Minister, Dr Ralph Gonsalves, who gave EC$1 million to the airline. Cullen said last week's meeting of the aviation committee of Caricom, devised a medium-term solution, which was offered by a World Bank consultant. "He gave a favourable initial reading that LIAT had a viable future and that the company inherently was operationally strong but it needed equity. The challenge then was where do you get the investment. They are engaging the same consultant to do a forensic audit of LIAT'S books. That will take at least eight weeks, " Cullen said. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.dbombo.net/muddyangels/ TnT Webdirectory: http://search.co.tt *********************************************************