Cash-strapped Air Namibia has survived liquidation attempts by defunct Belgian flyer ChallengeAir SA as the two firms reached a €10 million settlement minutes before liquidation proceedings were due to kick off.
ChallengeAir had filed for the loss-making flag carrier's liquidation last year, arguing that Air Namibia was insolvent and unable to repay approximately 253 million Namibian dollars ($17 million) in debt incurred for the lease of a Boeing 767 back in 1998.
Air Namibia had cancelled the lease agreement, after finding that the aircraft was defective. Negotiations between the two firms have been deadlocked since 2019.
Air Namibia will pay ChallengeAir SA €9.9 million, beginning with a €5 million payment before February 18 and monthly instalments thereafter until January of 2022, according to a settlement agreement seen by Reuters.
Buckling Under Mountains Of Debt
Air Namibia is buckling under mountains of debt. It currently employs 644 workers. The state-owned firm has failed to produce financial statements in recent years despite regular state bailouts over the last two decades.
The government has turned down the airline's pleas for more money, saying that 15 out of the airline's 19 routes are loss-making.