Namibia: Air Namibia Liquidation Application Postponed

30 October 2020

An application to wind up Air Namibia brought by Sisa Namandje on behalf of the defunct Belgian aviation firm Challenge Air will be heard on 1 December for the merits after lawyers agreed the matter is urgent.

Challenge Air is claiming the national airline is unable to pay its debts as it become due and is therefore commercially insolvent.

The debt Air Namibia owes Challenge Air is related to the leasing and maintenance of a Boeing 767-33 AER aircraft.

A dispute then started between the two entities, which led to several proceedings in the Windhoek High Court.

Thereafter the parties entered into an arbitration agreement, which stated that Air Namibia will repay the Challenge Air debt in instalments.

A further agreement was reached between the parties during December last year after Air Namibia allegedly failed to honour the previous agreement in which Air Namibia acknowledged it owes Challenge Air over 18 million euros (about N$350 million).

The agreement provided that Air Namibia pays an initial amount of 5 891 554 euros (N$113 million) and then monthly instalments of 580 000 euros (N$11.1 million) until August next year and 181 919 euros (N$3.4 million) in September next year. However, Challenge Air claims the national airline only made the payment of N$113 million plus further two payments of N$11.1 million and two payments of 579 897 euros (N$11.146 million), leaving a balance of more than 9 million euros (N$173 million).

Challenge Air further stated upon enquiry as to the outstanding balance, the airline admitted being unable to pay the rest of the debt.

"In the meantime, the first respondent's (Air Namibia) shareholder (government), numerous times through its authorized functionaries, publicly stated and acknowledged that the first respondent is insolvent and is unable to pay its debts as they fall due and that its liabilities exceed its assets," Anicet Baum, the Belgian liquidator of Challenge Air who brought the application through Namandje stated.

In response, Theo Mberirua, the interim CEO of Air Namibia, denied the airline is commercially bankrupt.

According to him, Air Namibia owns two Airbus A 319 aircraft and will take ownership of four Embraer aircraft this year.

He further stated that parliament appropriated an amount of N$984 million to the airline through the Ministry of Public Enterprise and they only utilised N$248 million of that money so far this year, leaving an amount of N$736 million.

This money, he said, is enough to pay the debt claimed by Challenge Air.

In addition, Mberirua said, they have requested the government to provide the amount sought by Challenge Air.

He amplified that by stating that the airline submitted a plan to government to restart its operations, which were brought to a screeching halt by the state of emergency declared by the President in the wake of the devastating Covid-19 pandemic.

As part of the plan, Mberirua said, Air Namibia requested an amount of N$56.8 million to pay Challenge Air and other creditors and further requested an amount of N$192.6 million to restart its operations.

Of this amount, he said, Challenge Air will be paid the outstanding monthly instalments set out in the settlement agreement.

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