Air Namibia (SW, Windhoek Int'l) has been placed into provisional liquidation by the Namibian High Court in Windhoek following an urgent application by the Namibian Airports Company (NAC).

The order by High Court Acting Judge Kobus Miller on February 26 will remain in force until March 26, 2021. It overtakes Air Namibia's own moves for voluntary liquidation, The Namibian newspaper reports.

State-owned NAC is one of the airline's biggest creditors, being owed more than NAD700 million Namibian dollars (USD46.5 million) in outstanding fees for aeronautical and ground handling services and rental at various aerodromes across the country, according to an affidavit before the court by NAC Chief Executive Officer Bisey Uirab. Unless the court intervenes, the estate of bankrupt Belgian carrier Challengair (1I, Brussels National) could attach all of Air Namibia’s assets and funds, effectively becoming a preferred creditor and leaving the rest out of pocket, Uirab argued.

Following an application by Challengair’s legal team, the Deputy Sheriff for the District of Windhoek has already attached NAD400,000 (USD26,589) from Air Namibia’s bank account, as well as one of its aircraft, reports New Era newspaper. This comes after the airline, on February 18, failed to pay the first EUR5.8 million euro (USD6.9 million) instalment of a EUR9.9 million (USD12 million) settlement reached with Challengair. The deal was a last-minute attempt to avert the liquidation of Air Namibia by Challengair over historic leasing debts.

"A forced sale in execution will result in much less being realised for the aircraft, as opposed to a sale by liquidator through public auction and/or private treaty, who will be much better suited and placed to properly advertise the aircraft and other assets of Air Namibia, and possibly selling the business of Air Namibia as a running concern, thus ensuring the best possible return for the benefit of all creditors of Air Namibia," Uirab stated.

The Namibian reported the National Union of Namibian Workers (NUNW) and Challengair's liquidator Anicet Baum had opposed the urgent application for provisional liquidation. They now have until March 26 to oppose the confirmation of the order. Meantime creditors will be prevented from attaching further assets of the airline pending an orderly winding down of the company.

The full extent of Air Namibia’s debt emerged from financial statements filed by the airline with the Business and Intellectual Property Authority (BIPA) last week. According to these, the airline’s debt totals close to NAD5.4 billion (USD358.9 million), while its assets amount to NAD1.04 billion (USD66.7 million).

Its single biggest liability amounts to NAD2.5 billion (USD166 million), which is the cost of returning two A330-200s to Castlelake, from whom the airline has been leasing the aircraft on a 12-year contract that started in late 2013.

Other debts and creditors include:

  • Rolls-Royce: NAD150 million (USD9.9 million);
  • NAC: NAD713.8 million (USD47.4 million);
  • Namibian Receiver of Revenue: NAD789.8 million (USD52.4 million);
  • Outstanding payments to 603 employees: NAD105 million (USD6.9 million);
  • Bank of Windhoek: NAD410 million (USD27.2 million);
  • Unflown ticket revenue: NAD133 million (USD8.8 million);
  • Namibia Civil Aviation Authority: NAD76 million (USD5 million);
  • Law firm Herfurth & Partner: NAD145 million (USD9.6 million);
  • Lufthansa Technik: NAD91 million (USD6 million);
  • International Air Transport Association (IATA): NAD38 million (USD2.5 million).

Its assets include two A319-100s with a combined value of NAD555 million (USD36.8 million), and four EMB-135ERs together valued at NAD90 million (USD5.9 million).