The shareholders of LIAT and Caribbean Star Airlines have announced that negotiations toward merging both carriers have been finalised. The announcement was made following a meeting held yesterday in Antigua between the Prime Ministers of Antigua&Barbuda, Barbados and St. Vincent & the Grenadines, primary shareholders of LIAT, and Sir Allen Stanford, sole shareholder of Caribbean Star Airlines. Merger negotiations had been ongoing since October 2006.
Under terms of the merger agreement, the Stanford Financial Group will lend the LIAT shareholder governments a total of US$55 million for the purpose of liquidating LIAT’s financial liabilities, as well as to provide working capital.
The US$55 million loan will be repaid to the Stanford Financial Group from the proceeds of an Initial Public Offering (IPO), which will be executed by an agency of the Stanford Financial Group within 24 months of the merger being finalized. LIAT’s primary shareholder governments have also agreed to guarantee the US$55 million loan as follows: Barbados- US$30 million, Antigua & Barbuda - US$20 million, and St. Vincent & the Grenadines- US$ 5 million.
Ownership of the new airline will be split among the current shareholders and LIAT staff as follows: Caribbeanshareholder governments and other LIAT shareholders - 60%, Stanford Financial Group - 35%, LIAT staff - 5%.
Legal and financial documentation related to the agreement are expected to be finalized within a week, with the final agreement to be completed by March 31, 2007.
In addition to the key shareholders of both airlines, other officials present at yesterday’s meeting included LIAT Chairman Dr. Jean Holder, LIAT CEO Mark Darby, Caribbean Star President & CEO Skip Barnette, Barbados’ Minister of Tourism Noel Lynch, Antigua’s Minister of Tourism Harold Lovell and other senior officials.