Air Antilles: a potential loss of €1.4 million?
At Friday’s territorial council meeting, Louis Mussington, Alain Richardson and Valérie Damaseau, who hold stakes in Air Antilles, did not take part in the debate on the requirement to set aside provisions for the impairment of the company’s financial assets. The exchanges between opposition members and Bernadette Davis, who was chairing the session on this point, were very heated.
SEM Air Antilles, incorporated on 18 October 2023 with a share capital of €2 million, 60% of which is held by the Collectivité (€1.2 million) and 40% by CIPIM (€800,000), has benefited, in addition to the capital contribution, from a shareholder’s current account advance (€6 million) and loans granted by the Collectivité (€13 million). In accordance with the accounting principle of prudence, the Collectivité must assess the risks likely to affect the value of its assets and, where necessary, set aside the necessary provisions or impairments. The proposed amount is €1.4 million.
Calculations based on an assumption
The entire argument regarding the calculation of this amount is based on the assumption of going concern… which will be confirmed, or not, this Thursday 2 April by the Commercial Court, which will decide whether the second offer from the sole potential buyer, Dr Sainte-Luce, is viable (the first having been rejected on social grounds).
Among the opposition, Marie-Dominique Ramphort notes that it is difficult to estimate a provision when the company’s exact losses are unknown, as elected representatives have not been privy to the accounts filed at the time of the suspension of payments, nor to the balance sheets for the past three years.
In response, the Director-General of Services stated that there is no information on which the Collectivité can rely to calculate this provision; the task is complicated as there are no regulations governing this matter. “This is not a budgetary matter but one of depreciation,” she explained.
However, as Jules Charville points out, the issue goes further, as elected representatives still do not have copies of the documents actually filed at the time of incorporation (the company’s exact name, shareholder structure, etc.); these were filed even before the Territorial Council vote on 20 October 2023. He also highlights the contradictory figures in the various documents and the balance of the latest loan disbursed despite the audit carried out in the meantime (of which the elected representatives were also unaware). He also asks the chair of the meeting about the guarantees provided to secure the loans? The aircraft? They do not belong to the company, but to the banks. He further notes that whilst the Collectivité claims it will not put a single penny more into the company, the proposed resolution states that, in addition to a financial contribution of €4 million to the capital, the new investor may “reasonably be asked to commit to long-term stability and possible participation in the SEM’s financing needs” … which implies that the same will apply to the Collectivité.
On these issues, the Chair of the session is unable to provide answers and decides to proceed directly to the vote, stating that the remarks made by opposition members are off-topic, which provokes the indignation of Philippe Philidor (Team Gibbs), who notes the embarrassment and lack of grasp of the matter. As for the progress of negotiations with the buyer, as the President was unable to take part in the debate, it was impossible to ascertain the current status. Since September 2023, opposition members have repeatedly raised concerns about the decisions taken and have once again attempted to highlight the consequences of this new measure. For Daniel Gibbs, a provision of €20 million would be required, as this would correspond to the actual risk of loss. Bernadette Davis cut short the remarks this time by putting to the vote the creation of “a provision of €1.4 million intended to cover the risk of non-recovery associated with the shareholder’s current account advance granted by the Collectivité to SEM Air Antilles, in the context of the ongoing administration and in view of the implementation of a going concern plan designed to preserve the prospect of repayment or partial write-off”. The senator pointed out from the outset that the proposed amount was derisory given the risk involved, and that this estimate was based on the takeover of Air Antilles, whereas there was no certainty that this would be the case; furthermore, as the decision was to be taken after the vote, she preferred to err on the side of caution and abstain.
Two other members of the majority followed her lead; nine voted in favour and the six members of the opposition voted against. President Mussington remains optimistic and believes there is still a chance to develop this airline, particularly through Caribbean connectivity, and that the Collectivité will have a third chance to start afresh on a new footing with a new team.
