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24.02.2009 Business & Finance

GIA denies bailout plea

By myjoyonline
GIA denies bailout plea

The Ghana International Airlines (GIA) has denied media reports that it is asking government for a financial bailout.

Chief Executive of the GIA, Ms Gifty Annan-Myers, said the mention of a US$52 million bailout suggests the company is on the verge of collapse.

Her comment comes amid media reports that the state airliner is in dire need of a rescue package to shore it up.

But speaking to Joy Business News on Tuesday, Ms Annan-Myers said the figure quoted by a newspaper in Accra was rather contained in a business plan that GIA presented to government at its establishment in 2005 after the liquidation of Ghana Airways.

She indicated that what has been presented to the Mills administration is a copy of the original business plan that was supposed to have been pursued when the GIA was first established.

Ms Annan-Myers said although the plan would have ensured a profitable airline, it was never followed.

The GIA boss maintained that present indications suggest government is committed to running the airline as a profitable entity.

“I made approaches to apprise them of our peculiar situation and I was very well received,” she said.

The government of Ghana currently holds 70% shares in GIA while GIA-USA holds the remaining 30%. Management of the company was ceded to the minority partner under a signed agreement.

The company ran into hot waters soon after it was established when the government of Ghana dismissed the minority GIA-USA.

The foreign partner subsequently filed legal papers against the government of Ghana at The Hague seeking redress for breech of contract.

Although the court is yet to make a final determination on the matter, officials of GIA-USA say they are set for arbitration.

The Monday February 23 edition of the Business & Financial Times reported of a meeting between the board of the GIA and some government officials including the Ministers of Finance and the Attorney General over the botched deal.

After the meeting, GIA was advised to form a Special Purpose Vehicle (SPV) company to enable it to circumvent the legal impasse.

For now the company is yet to wean itself off a monthly US$1.5 million financial assistance package from government.

Story by Fiifi Koomson

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