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21.09.2004 Business & Finance

Ghana Airways Partners Now Looking For Money!

By Palaver

Sentry Financial International Inc, the Salt Lake City, Utah (home of the Mormons)-based Company that is partnering the St. George, Utah-based World Transport Group Inc in a consortium with the Government of Ghana to form the Ghana International Airlines to replace Ghana Airways, is now looking for money to bail out the ailing airline. In fact, the Company is even yet to finalise its business plan in respect of Ghana Airways.

According to Mr. Kirk Heaton, Sentry's executive vice president, "we're trying to finalize our business plan and when that's completed, we will use it to raise money from potential investors and go to the strategic partners to see how best to achieve our goal, which are multiple flights into Europe and the US from Ghana".

Mr. Heaton also stated that the Company was looking to raise $50 million to $75 million, maybe $100 million, to start the operations of the airline. In the words of Mr. Heaton, "eventually, after we raise the money and the equity investors come in with the cash, the

Thus far, the following facts are unchallenged:

The two companies involved in the consortium with the Government of Ghana to form Ghana International Airlines - Sentry Financial International Inc. and World Transport Group Inc - to replace Ghana Airways, are both from Utah, the state of the Mormons in the USA;

The St. George, Utah-based World Transport Group Inc. will handle the operations aspect of the airline, while the Salt Lake City, Utah-based Sentry Financial International Inc. is to raise the money to get the new airline off the ground;

(iii) Ghana International Airline does not exist as at now. It is a consortium being formed by Sentry Financial and World Transport Group for the sole purpose of partnering the Government of Ghana to replace Ghana Airways;

(iv) Sentry Financial Inc, the company that is to raise the money, does not yet have a business plan for the new airline; it is now preparing one;

(v) Sentry Financial Inc. does not also have money of its own. The Company is hoping that when it finalises its business plan, it will be able to use it to raise money from potential investors.

The following publication, which is sourced from the "Dessert Morning News" web site on the Internet, tells the rest of the story:

UTAH FIRMS HELPING WITH GHANA AIRLINE

GHANA International Airlines, a consortium led by Salt lake-based Sentry Financial International Inc. and St. George-based world Transport Group Inc., will partner with the Republic of Ghana to replace Ghana Airways, an airline that in recent years has been beset by myriad problems.

Commercial operations are expected to begin in the first quarter of 2005 with daily flights to Europe and the United States.

"There will be a new entity owned between the government and the GIA consortium," said Kirk Heaton, Sentry's executive vice president. "World Transport Group will handle the operations aspects of this, and Sentry Financial is to raise the money to get the new airline off the ground.

"Obviously, it's not cheap to start an airline. We're looking to raise $50 million to $75 million, maybe $100 million, to start the operations of this airline."

World Transport Group's President is J. Ralph Atkin, founder of St George-based SkyWest Airlines Inc. Atkin will be Chief Executive Officer and in charge of establishing and managing the day-to-day operations of the new airline. SkyWest is not involved in the GIA situation, Heaton said.

"We're trying to finalize our business plan, and when that's completed, we will use it to raise money from potential investors and go to the strategic partners to see how best to achieve our goal, which are multiple flights into Europe and the U.S. from Ghana," he said. "We've done a lot of legwork and groundwork already, but there are a lot of things that still have to happen, not the least fo which is we've got to raise money from investors."

Ghana's government had sought bids earlier this year for a partner to take over Ghana Airways or create a new airline. GIA was selected, and the country and GIA began negotiations.

A Ghanaian entity will be established and jointly funded by the government and GIA, and a task force will manage the wind-down of Ghana Airways operations.

"In the preliminary stage, there is a split between the government and GIA; however, GIA will have operational control of the airline. The government will not," Heaton said.

"Eventually, after we raise the money and the equity investors come in with the cash, the government will be in a minority position, as will GIA, and from that point on, whoever the investors are will choose the board of directors, who will choose the executive officers, and it will go along that way."

Ghana Airways' problems included rising debts and operational troubles. Established in 1958, it once had 30 aircraft, but many are older models. Heaton said GIA will use newer aircraft to build its fleet. The government now owns all of its issued and outstanding shares of Ghana Airways.

"Ghana Airways has been around many years but has fallen on hard times, as many airlines have," Heaton said. "The government made the strategic decision to bring in a strategic partner-someone from the outside-basically to fix the airline. As the process went forward to find a strategic partner, and it took about a year, the fortunes of the airline became even worse.

"The decision now is that they have found a strategic partner in us, and we will create a new airline. It will move forward and create the airline hub in Ghana for West Africa. The debts and obligations of the old airline will be assumed by and taken over by the government itself, and it will deal with creditors as it deems fit."

The Federal Aviation Administration recently shut down Ghana Airways from landing or operating aircraft in the United States, although it has limited operating authority to accommodate customers stranded in this country, Heaton said.

The new airline is expected to have routes to the United States, the United Kingdom and Germany during the 2005 first quarter.

"We hope to have daily flights to Europe and the U.S. and eventually maybe multiple flights each day," Heaton said. "Right now, we'll shoot for one a day, six or seven days a week."

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