Challenge Air eyes TransNamib assets
The European company says even if Air Namibia is liquidated, the shareholder or sister company TransNamib must step in to give Caesar what belongs to Caesar.
08 October 2020 | Transport
Belgian company Challenge Air SA, assisted by local lawyer Sisa Namandje in the Namibian High Court in its efforts to have Air Namibia liquidated, plans on attaching TransNamib assets as bailout for the national airline.
Air Challenge has vowed to recover money owed to it by the national airline even if it is liquidated, a person close to the matter told Namibian Sun.
Air Namibia was a TransNamib subsidiary in the late 1990s when their airline entered into a lease contract with the Belgian company.
The company is owed approximately N$400 million for the lease of a Boeing 767 Air Namibia took delivery of in 1998. The airline, however, returned the aircraft, citing defects it noticed.
The lease of the aircraft has now come back to haunt TransNamib, which was the parent company of Air Namibia at the time.
A person familiar with the matter said liquidation would not set government free from its obligations to Challenge Air and that an application would be sought against TransNamib if Air Namibia's liquidation went through.
“We are hearing they want to liquidate, but pay they will pay,” the source said.
“If government liquidates Air Namibia, TransNamib has more than enough assets to attach.”
Challenge Air launched an application this week to have the national airline liquidated.
TransNamib not responsible
When approached for comment, TransNamib CEO Johny Smith maintained that TransNamib is not responsible for Air Namibia's legacy debt.
Air Namibia was made part of TransNamib in 1997 when the rail operator was restructured.
The two companies were split again in 1998, with Air Namibia given the responsibility to manage government's commercial aviation business while TransNamib would operate the rail business.
“When Air Namibia moved out, the aviation assets and liabilities went with Air Namibia.
“All aviation assets were ceased to Air Namibia [from TransNamib],” Smith said.
“TransNamib is not accountable for Air Namibia,” he further added.
Public enterprises minister Leon Jooste did not respond to queries regarding government's stance on the matter.
Breach of contract
Earlier this week, Challenge Air accused Air Namibia of breaching contract.
“Air Namibia, after paying part of the instalments, has since regrettably and materially breached the agreement by failing to pay the remaining monthly instalments,” it said.
“It is therefore very clear that Air Namibia is not able to pay its debts as they fall due, a fact which it has readily admitted.”
Challenge Air further said it was clear Air Namibia was in deep commercial insolvency.
Air Namibia gave notice that it will be opposing the application for its liquidation brought on by Challenge Air.