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Air Namibia’s debt was not sustainable

Air Namibia’s debt was not sustainable

Zorena Jantze & Eba Kandovazu

 

THE Minister of Finance, Ipumbu Shiimi has stated that all options were explored in an attempt to save the national airliner, Air Namibia, however, at the end of the day, the public entity’s debts could no longer be sustained which resulted in the decision to voluntarily liquidate the beleaguered airline.

 

Shiimi explained that currently, the airline’s assets are worth N$981 million while its liabilities are over N$3 billion. The finance minister made these remarks at the briefing which was also attended by the minister of public enterprises, Leon Jooste, and the director-general of the National Planning Commission, Obeth Kandjoze.

 

The finance minister added that the difficult decision to liquidate Air Namibia was taken after careful consideration of the various options to save the national airline.

 

Air Namibia debt sustainable Minister Finance Ipumbu Shiimi explored national airliner
Photo by Eba Kandovazu

 

He further explained that the government has spent more than N$8 billion on Air Namibia and at this stage, the country’s economy, can no longer afford to perpetually provide financial support to the airline at the expense of supporting economic growth and critical social services.

 

“It is, therefore, with that consideration that government took a decision to file for the voluntary liquidation of Air Namibia. It is believed that liquidation is going to cost Government over N$2 billion. It is important to note that the cost of liquidation is not generally borne by shareholders, in this case, the government. Liquidation expenses are normally paid out of the proceeds of the sale of assets of the company that is being liquidated.” Shiimi explained.

 

He further stressed that the welfare of the employees remains a priority and it is for this reason that government commits to an ex-gratia payment to the value of 12 months salary for each employee.

 

Jooste at the same event said that Air Namibia does not have money to pay the debt incurred with Challenge Air, even though the first payment, in the amount of N$104 million is due next week.

 

“There are legal implications against the stakeholder if it doesn’t avail the funds. I cannot share anything further than that,” Jooste said.

 

He also denied having any shares in the private airline owned by West Air.

 

“I don’t have direct or indirect shares in West Air, nor do I intend on doing so in the future,” he said.

 

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