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Liat, Star strike financing deal
 
liat
Liat and Caribbean Star entered a commercial alliance on February 1.
The merger between Caribbean Star and Liat moved a step closer after the shareholding and financing terms were agreed.

The shareholder governments of Caricom and other smaller shareholders will get a majority 60%ownership.

The Stanford Financial Group, which owns Caribbean Star, will get 35% and the remaining 5% will go to Liat's staff.

The details were announced by the St. Vincent and the Grenadines Prime Minister Ralph Gonsalves after a meeting in Antigua.

Dr Gonsalves chaired a meeting of leaders of the three major shareholder governments of Liat and Caribbean Star's owner Sir Allen Stanford.

"Liat and Caribbean Star will merge," he told BBC Caribbean. "Liat will essentially purchase Caribbean Star."

That will be done courtesy of a loan of US$55 million from the Stanford group.

Initially that sum was to be shared between Stanford and the Venezuelan government but Dr Gonsalves said the funds from Caracas had not come on stream as yet.

Public Offering

The loan will help to liquidate Liat's debts and fund its working capital.

The loan will be guaranteed by the governments of the three major shareholders -- Barbados , Antigua and Barbuda and St Vincent and the Grenadines whose Prime Ministers attended the meeting.

The governments agreed to repay the loan from the proceeds of an international public offering which will be managed by an agency of the Stanford Financial Group.

"We now must match fiscal prudence with commercial soundness and all future decisions of the new Liat will have to be conducted only by reference to the commercial," said Babados leader Own Arthur.

Liat and Caribbean Star entered a commercial alliance on February 1 and officials expect the merger to be achieved by mid-year.

 
 
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