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28.08.2004 Business & Finance

US Consortium To Buy Into Ghana Airways

By Reuters
US Consortium To Buy Into Ghana Airways
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August 27, 2004 -- US-based consortium Ghana International Airlines has won a bid to acquire a stake in debt-ridden flag carrier Ghana Airways, an official in the West African country said on Friday.

"Negotiations have been concluded for Ghana International Airlines (GIA) to take up 30 percent in Ghana Airways. The Ghana government will hold the remaining 70 percent," Gustav Azu, chairman of a government-appointed interim task force for the troubled national carrier, said.

GIA, a consortium led by a Utah-based firm called Sentry Financial Corporation, was expected to invest USD$55 million and take over management of the airline, he said.

The government would ring-fence Ghana Airways' USD$160 million of debt and negotiate repayment terms with creditors, Azu said.

Another USD$7 million of operating costs, including leasing aircraft, installing an automated ticketing system and paying staff over the next three months, would be split between the two partners.

Azu said the 1,200-strong workforce, which includes 58 pilots, would be cut: "Downsizing is sure to happen. The excess fat just has to go."

Ghana Airways operates four leased aircraft to serve a dozen destinations in Europe, the United States and West Africa. It has become infamous for delays and cancellations.

The government suspended its operations earlier this month and sacked the carrier's board.

The US Federal Aviation Authority (FAA) has stopped Ghana Airways flying into its airspace, citing safety complaints on one of its leased DC-10s, at the end of July. Hundreds of passengers were stranded in the United States and Ghana.

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