Ghana Airways in final phase of liquidation

Accra, June 20, GNA - The Official Liquidator (OL) of Ghana Airways Limited has so far sold 30 of the 55 landed properties available for sale at the inception of the liquidation, bringing the total realizations to US$17.3 million.

This came to light at the company's Fourth Creditors Meeting held in Accra on June 15, 2007 to provide creditors with an update of the progress made in the exercise in accordance with the Bodies Corporate (Official Liquidation) Act, 1963, Act 180.

A statement issued to the Ghana News Agency on Wednesday said the liquidation process, now at its final phase, spanning the period January one to May 31, 2007 as outlined by the OL, entails completion of asset realization, administration of creditor claims, and payment of dividends. The process also involves compliance with statutory requirements, including the holding of regular creditors update meetings. The statement said the OL had substantially realized the bulk of GH assets except for a few which are subject to third party ownership disputes.

"The OL has reported that he has made additional asset realizations of about US$4.6 million from the last creditors meeting, bringing total asset realizations to date to about US$17.3 million. "The OL estimates to make additional realizations of US$12.6 million, bringing the total realizations to the close of the liquidation to about US$30 million.

"This shows there has been a significant improvement in expected total asset realizations from the initially projected US$20 million as reported in the first meeting of creditors."

The statement said the bulk of the GH realizations came from the sale of fixed assets, mainly landed properties, which account for about 65 per cent of the total projected realizations while other proceeds were from the collection of receivables, cash accounts and commercial agreements.

"The unsold properties are mainly due to third party ownerships disputes which the OL is actively resolving, while a few others, particularly the local outstations, have attracted bids which are low when compared with the assessed values for the same and the OL is in the process of advertising these properties."

On agreements of creditor claims and GH creditors in general, the statement said the OL had received a total of 260 creditor claims amounting to US$209 million to date, excluding employee claims. The claims, it said, were divided into three main categories in accordance with Act 180, that is, secured, preferential and unsecured claims.

"To date, the OL has agreed 62 per cent of the total body of creditor claims. About 38 per cent of the received claims are still under reconciliation mainly due to lack of sufficient documentation or are subject to legal disputes pending before determination. With regard to secured claims, the statement said the OL had agreed and made provisions for the payment of four of the six secured creditor claims amounting to US$22 million and to the two preferential claims received from the Internal Revenue Service (IRS) and the Social Security and National Insurance Trust (SSNIT) respectively.

It said an amount of US$1.6 million had been made to SSNIT in full and final satisfaction of its claims in the liquidation, adding that the Government of Ghana had agreed that the OL could retain the about 18 billion cedis, approximately US$2 million GH owed to IRS for unpaid payroll taxes as part of GoG's support for the liquidation..

On unsecured claims and employee claims, the statement said the OL had agreed 155 unsecured creditor claims valued at US$55 million while GH employees, excluding pilots and flight engineers, who had filed a suit against GH and GoG at the High Court in Tema for their severance claims had now opted for an out of court settlement of the matter. It said that meanwhile, OL had made full payment of an amount of about US$1.4 million to former GH pilots and flight engineers following the arbitrator's award as a result of GoG's top-up of US$1.3 million enabling the OL to pay the full 100 per cent of the arbitrator's award.

The statement said OL had also agreed and paid dividends on severance to employees in the United States (US) and Nigeria stations, and was engaging in discussions aimed at agreeing on severance claims for the remaining outstations, especially the West African Francophone countries.

On the GoG support for Creditors, the statement said GoG had provided additional support to the GH creditors in various ways and would continue to work with the GoG through the Ministries of Finance and Economic Planning, Aviation and parliament to secure additional budgetary support for the liquidation.

On dividend declaration, the statement said .based on the revised Expected Final Outcome (EFO), the OL projected that he would be able to pay a total dividend of ten per cent o unsecured creditors by the close of the liquidation, a marked improvement from the seven per cent estimated at the inception of the liquidation.

This, it said, excluded the top-up payments GoG had made to date to the body of unsecured creditors.

"By the beginning of the Fourth Creditors Meeting, the OL had declared total dividends of five per cent to unsecured creditors, adding that GoG had matched this amount by an additional five per cent, bringing the total dividend received to ten per cent. At the fourth creditors meeting, the OL declared an additional two per cent dividend to unsecured creditors payable in July 2007, bringing the total dividend declared by the OL to unsecured creditors to seven per cent.

"The OL is in discussions with the GoG to match the two per cent dividend declared at the meeting, adding that should GoG agree to match the declared dividend, the total dividends received by unsecured creditors by the end of July 2007 would be 14 per cent.

The statement touched on the next steps to be taken, which includes discussions with former GH staff with the view to arriving at an amicable agreement on the employee related claims.

Others are to deal with the resolution of ownership disputes over disputed properties to free them up for sale; matters in litigation, including continuing to defend legal action from third parties and to initiate legal action to protect the interest of creditors as appropriate.

The rest are declaration and payment of dividends as funds become available and completion of administrative and statutory duties, including the holding of regular creditor progress meetings and working with the GoG through the Ministries of Finance and Economic Planning, Aviation and parliament to secure additional budgetary support for the liquidation. 20 June 07