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WINDHOEK (Reuters) – Cash-strapped Air Namibia survived attempts to liquidate defunct Belgian plane ChallengeAir SA on Friday, when the two companies hit a € 10million ($ 12million) settlement within minutes before the start of the liquidation procedure.
ChallengeAir had requested the liquidation of the loss-making national carrier last year, arguing that Air Namibia was insolvent and unable to repay around N $ 253 million ($ 17 million) in debt incurred for the lease of a Boeing 767 in 1998. .
Air Namibia terminated the rental agreement after finding that the aircraft was defective. Negotiations between the two firms have been deadlocked since 2019.
Air Namibia will pay ChallengeAir SA 9.9 million euros, starting with a payment of 5 million euros by February 18 and monthly installments thereafter through January 2022, according to a settlement agreement seen by Reuters .
Air Namibia is plunging under mountains of debt. It currently employs 644 workers. The state-owned company has failed to produce financial statements in recent years despite regular state bailouts over the past two decades.
The government rejected the airline’s demands for more money, saying 15 of the airline’s 19 routes were loss-making.
(1 USD = 0.8243 euros)
($ 1 = 15.1180 Namibian dollars)
Reporting by Nyasha Nyaungwa; Editing by Mfuneko Toyana and Sonya Hepinstall
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