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13.10.2004 Business & Finance

Spectrum Capital's Plans to Restructure Ghana Airways Foiled

By Chronicle
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PLANS OF one of the world's biggest airlines, Messrs Spectrum Capital (Spectrum) to restructure Ghana Airways and keep it at the forefront of African civil aviation became a fantasy because of countless frustrations by Ghana Airways.

Since its establishment in 1985, Spectrum's London team has procured some 198trillion (US$22billion) of financing for its customers including British Airways, Alitalia, Rolls Royce and Partners Finance, UK Airline, EU Airline and Air Canada Restructuring.

Business Chronicle gathered that at the last count November 27, last year, Spectrum had no choice than to back out since persistent efforts to get the management to attend to them to negotiate on the transactions were fruitless.

According to experts, the company's indicative proposal to restructure the finances and operations of the embattled airline, from all indications was bigger and better than that of Ghana international Airline, which was allegedly, now gathering funds to revamp the airline.

The Spectrum who wanted to give a helping hand to the Airline presented its proposals at the time the airline has started bleeding from corruption and huge debt.

A copy of Spectrum's proposals sighted by the paper indicated that the focus of the restructuring was to be on the ability of the airline to generate enough foreign exchange income to service its financial obligations, without recourse to the public purse.

The proposal noted that the existing financial obligations of the airline were to be consolidated to form a unitary loan and then the working capital requirements of the company would be assessed in the light of its fleeting needs, the financing of that re-fleeting, the sources of the aircraft, the disposal of the existing fleet.

It stated that the current fleet was old, its reliability was deteriorating and its maintenance and operating costs were rising.

The proposal emphasized that because of the fall in world air traffic and the general downturn in the world economy, there was a unique opportunity for Ghana Airways to re-equip its fleet with suitable young, reliable aircraft, thereby improving its performance, lowering its operating cost and improving the bottom line.

The proposal stressed that management was to be revamped and retained for a minimum contractual period to over at least the initial loan repayment period.

After the presentation of the proposals, on September 18, last year one of the managers of Spectrum, Mr. John Sharman was obliged to write to Ghana Airways about their intention to travel to Ghana for talks subsequently Ghana Airways replied and arranged for a meeting for 5th November, the same year.

Spectrum responded and rescheduled for 12th to 14th of November last year. Since Ghana Airways refused to respond to Spectrum's letters, Mr. Phillip Owusu the then Chief Executive of Ghana Airways was reported to the chairman of Ghana Airways, who wrote an invitation letter to Spectrum.

Spectrum replied that because of the delay in confirming the dates, they have made other travel arrangements and suggests 20th November for the meeting.

On November 21, Spectrum informed by Ghana Airways that the cut off date for the selection of potential partners was November 30th but Spectrum replied that because of the very short notice, they were not in a position to submit any new documents.

Mr. Phillip Owusu told Business Chronicle that he could not have talks with Spectrum because of his tight schedule.

He noted that he did not have control on his schedules but always depended on what assignment has been given to him.

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