12.05.2006 Business & Finance

Ghana Airways To Pay Its Creditors

12.05.2006 LISTEN

The Official Liquidator of Ghana Airways Limited would pay about two per cent of its declared dividend to creditors of the company in June this year. Available records indicate that the grand total of creditor claims to the company by April 30 this year was 190,527,050.47 US dollars.

"Under section 45(1) of Act 180, the Liquidator is required to declare and distribute dividends to creditors from time to time and as early as practicable in the liquidation process." An official of PriceWaterhouseCoopers Ghana Limited, Financial Consultant to the Liquidator, Felix Addo, said Government had confirmed that it would march the dividend as part of its support for creditors in liquidation.

At the second creditors meeting, in Accra on Wednesday to brief creditors on the progress report, Mr Addo said only seven per cent of the grand total would be paid as dividend to unsecured creditors. He said, "The timing and quantum of a dividend payment is determined by the levels of assets realisation, liquidation costs and creditors claims proven and submitted."

Mr. Addo said although the realisations from certain classes of assets like land and buildings were to be slightly higher than previously estimated, realisations from other classes of assets like motor vehicles and chattels would be lower.

"Based on preliminary figures, the Liquidator's initial estimated final outcome statement showed that unsecured creditors were likely to receive only about seven per cent of the amount due them by Ghana Airways," he said. He said a total realisation of about 24 million dollars was expected, however, the unsecured creditors would total about 180 million dollars.

The 24 million dollars constitute about 2.2 million dollars from receivables, 3.2 from equity investments and 19.2 million dollars from fixed and other assets. Mr. Addo mentioned that there were a number of suits pending against the company in some countries and noted that there were potential of further legal action by employees in other jurisdictions for severance of claims.

"In most of these jurisdictions such claims would be unsecured, however, they still have the potential of having significant impact on costs of liquidation through legal cost," he explained.

He said the Liquidator, continued with assets realisation process; pursue supplementary budget process for additional funds from government to top up dividend to creditors including former employees. There would be continuous administration of creditors claims, resolution of matters in litigation and declaration of payment of dividends as and when funding was available, Mr Addo assured creditors.

"The Liquidator will declare and pay further dividends as early as possible in line with her fiduciary duties," he said. An official Liquidator, Elizabeth Owiredu Gyampoh, noted that there was a lot of risks associated with the liquidation of such companies but said a little progress had been made.On June 22 last year, the Government, acting through the Ministry of Finance and Economic Planning, resolved to liquidate Ghana Airways Company under section 2 of Act 180.

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