Air Namibia creditor rejects settlement offer

19 October 2020 | Transport

OGONE TLHAGE

WINDHOEK

Belgian company Challenge Air SA has rejected a settlement offered by Air Namibia, citing mistrust in the airline’s ability to make good on its N$400 million debt.

The airline also owes the International Air Transport Association (IATA) a sum of N$26.4 million, and its lawyers in Germany N$5.6 million, Namibian Sun understands.

IATA is the regulator of the international airspace and issues licences for airlines to fly.

Challenge Air is owed approximately N$400 million for the lease of a Boeing 767 that Air Namibia took delivery of in 1998. The Namibian airline returned the aircraft, citing defects it had noticed.

In 2008, Challenge Air obtained a judgment from a German court which ordered Air Namibia to pay it US$6.5 million (N$104 million) for unpaid rent, maintenance and insurance of the Boeing.

In another judgment in July 2011, Air Namibia was ordered to pay Challenge Air an additional US$13 million (N$208 million) in interest on the outstanding debt.

Late last year, the government provided a guarantee of N$578 million to allow Air Namibia to borrow money from commercial banks and keep Challenge Air from attaching its fleet of Airbus A330-200 planes used on the Frankfurt route.

“Kindly be advised that your offer of settlement in its current form is rejected for the following main reasons,” writes Namibian lawyer Sisa Namandje, acting for Challenge Air.

“There is uncertainty as to how much Condor is prepared to pay Air Namibia for onward payment to Challenge Air.

“It appears from the disclosure which you made that Air Namibia is further indebted to IATA in amounts in excess of US$1.6 million and to its attorneys in Germany in amounts in excess of €290 000 (N$5.6 million). There is thus no guarantee that Challenge Air would receive any of these part payments from these third parties,” Namandje wrote.

Challenge Air added that Air Namibia had provided no clarity on how it intended to pay the remainder of its debt.

“Air Namibia is silent on how it intends to settle the remainder of the amounts owed to Challenge Air. No financial guarantees or guaranteed payment arrangements were proposed by Air Namibia,” its Namibian lawyer said.

The Belgian firm recently applied for the liquidation of Air Namibia.

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