CABINET KOEIMAN BOUGHT 51% OF 125 MILLION DOLLAR OF INSELAIR DEBT
WILLEMSTAD — The cabinet of former Prime Minister Koeiman, bought 51% of InselAir debts, which at the moment is calculated around 125 million dollars.
In september of 2016, the financial situation of aviation company InselAir was very fragile, reason why they approached the government for financial help. The company had no cashflow and they asked for an advanced payment of the airlift development support they receive yearly from the Curacao Tourism Development Foundation.
InselAir financial situation was bad, they couldn’t pay the tax and neither the social premiums and pensions. This had also effect on the regular planning of the C-checks. InselAir was postponing the regular C-checks, which had it’s negative impact on generating income for the company.
According to InselAir, they had 96 million dollar of sold tickets in Venezuela, but it was not easy to get the money out of Venezuela on a short term. So it’s was very difficult for InselAir to bridge the cashflow problem. This conduced InselAir in lowering the flights to Venezuela from 32% of capacity to 5%, so they have more possibilities and capacity to execute other flights to new destination. InselAir tried also to get arrangements with creditors and also an exemption on tax and social premiums till July of 2017. Since 2015 InselAir was not paying taxes and social premiums.
InselAir does not have controlled annual returns. They had just an accountant review of the yearbook. So information about InselAir was very limited. But it was clear that exemption of tax and social premiums till July 2017 will be around 30 million dollar. It was also clear that actual return of InselAir was not sufficient to bridge the cashflow deficit of 15 million dollars.
To continue the operation, InselAir needed cashflow urgently. For this reason a team of professionals made a brief analysis of InselAir and they gave some recommendation of steps that have to be taken. The official figures of InselAir administration was needed, to get a overall view of the company. In the recommendations, they indicated if the government invests in InselAir, they must get a majority of representation in the commissioners. Also a crisis manager was needed. The crisis manager should look for new routes, planning of the fleet and also purchasing process of the company.
Although the report didn’t gave a positive view of the company’s financial situation, the government decided to give a loan of 33 million guilders to InselAir. With the investment of 33 million guilders, InselAir was supposed to bridge the cashflow deficit they had. The government with the injection of 33 million guilders in InselAir (which seems lost by now), has now 51% participation in the company. But according to the updated information on InselAir, the company has an amount of 125 million dollars of debts, which means that cabinet Koeiman with Minister Rhuggenaath and Camelia-Römer bought 51% of the 125 million debts of InselAir. Meanwhile Cft recommends to make an alteration of 33 million guilders in the yearly budget of Curaçao.