Valley: No Govt takeover of BWIA

GOVERNMENT is not pumping excessive monies into national airline BWIA, as it intends for the airline to be more “private sector driven.” Futhermore,  Caricom Heads of Government are unlikely to announce the creation of a regional airline when they meet in Antigua in July. This was revealed yesterday by Trade Minister Ken Valley. Valley said there were several misconceptions about a statement from BWIA which indicated that it intended to raise US$40 million by way of a rights issue.

“BWIA has taken a decision that they are going to raise this equity by a rights issue. It is not another $40 million because all the newspaper articles came out as though in addition to the $40 million they are getting from Government, they were going to raise $40 million by a rights issue. That is not so. BWIA has decided that this equity issue will be via a rights issue. In other words, they will raise this money from existing shareholders by offering to existing shareholders 27 shares for everyone shares that they now own. “If you have 100 shares with BWIA, you will then be allowed to buy 2,700 shares at a price of 20 cents per share,” he explained.

At a post-Cabinet news conference two weeks ago, Valley announced that Govern-ment was underwriting US$40 million in an equity issue for BWIA.  Of that sum, US$30 million was converting debt into equity, while the remaining US$10 million will be new money going into BWIA. The Minister stressed that the rights issue is not an attempt by Government to regain control of BWIA. “As long as all the existing shareholders pick up their proportionate parts, the Government will remain with its proportionate part which is 33.5 percent of BWIA. To the extent that they fail to, the Government will buy more,” Valley said. Reiterating that Gov-ernment wants to be private sector driven, Valley said this will be the core of discussions between the Government and Virgin Atlantic Airways chairman Sir Richard Branson when Branson attends next month’s Euro Latin American Money Conference held in TT.  Admitting that individuals with Branson’s financial acumen could assist BWIA’s quest for viability, Valley said Government intended to be “extremely transparent” and will issue a government-to-government information memorandum, clearly spelling out its plans for BWIA.

“Those who want may come. The Government believes BWIA should be private sector driven, with the Government holding a golden share and buying services from BWIA as required,” he added. Valley said he has not held formal discussions with Branson about investing in BWIA. The Minister assured the TT Transparency Institute that all of Government’s actions regarding BWIA are above board. “In doing the analysis, the feeling is that as long as BWIA can be saved, BWIA is the best option. Our analysis suggests that given where TT is today and where TT wants to go, TT needs its own national airline. It is going to be more costly to liquidate BWIA at this time and start over.

Better to restructure BWIA,” Valley said. He said it appeared unlikely that a BWIA-Liat merger would take place on July 1. “The key thing is the operating efficiency and what we need to do to give it viability. There may be some delay of the regional airline,” Valley said. He hinted that August seemed a more likely date for the merger and the services of both airlines could be fashioned into “a hub and spoke arrangement” with BWIA and Liat doing the long and short hauls respectively. Valley said he would have a clearer picture of the way forward once Government-appointed consultants SH and E International Air Transport Consultancy submits their final report on BWIA’s operations by the end of May.