Cash-strapped Air Namibia survived liquidation attempts by defunct Belgian flyer ChallengeAir SA when the two firms reached a 10 million euros ($12 million) settlement minutes before liquidation proceedings were due to kick off.
ChallengeAir SA had applied to the Namibian High Court to have the carrier liquidated.
It also filed for the loss-making flag carrier’s liquidation, arguing it is insolvent and unable to repay about $16.7 million in debt incurred for the lease of a Boeing 767 back in 1998.
Air Namibia canceled the lease agreement after it found the aircraft to be defective.
Lawyers representing the two parties reached a settlement agreement minutes before the liquidation proceedings were due to start in the capital, Windhoek.
Air Namibia will pay ChallengeAir SA $12 million, starting with $6 million before February 18 and thereafter monthly installments of $821, 920 until January 2022.
Air Namibia chairman Escher Luanda had on Wednesday remarked that if liquidated, the airline — which owns two Airbus A319 jets and four Embraer 135 regional jets — would get little in return for its assets.
“The liquidation would erode any possible value in the airline’s assets, with the six aircraft and the head building having to be auctioned at negligible amounts of as little as 20 percent,” Luanda said in a letter to Namibian Minister of Public Enterprises Leon Jooste.
Finance Minister Iipumbu Shiimi said Friday that Air Namibia has significant unsustainable debts though the Namibian government has spent 8.4 billion Namibian dollars to bail out the national airline over the past 10 years.
The airline, which currently has 644 workers in its employ, has failed to produce financial statements in recent years despite receiving state funds between 1999 and 2018.