Cape Verde: Airline in technical insolvency, says TACV president

2 April 2009

Praia, Cape Verde, 2 Apr – TACV – Cabo Verde Airlines is in a situation of “technical insolvency,” its board having asked the government to take measures to restructure the company.

The company’s situation has been set out in a letter from TACV director to its employees which explains the current financial situation and puts forward a series of proposals to avoid actual insolvency.

According to António Neves, the company has been accumulating “successive losses” over the years that has led to the situation of technical insolvency.

“The company has only survived because it has accumulated debts on top of debts. And also because the creditors have turned a blind eye and until now, not one has called for its closure – this spells insolvency,” says the letter, shown in the local press.

“We have already suffered serious refuelling crises at foreign airports. In desperation, we have already had to pay route and airport taxes just to be able to take off from Praia,” he said.

To resolve the situation, the Board of Directors decided to review the company’s various subsidies, looking also to stopping overtime payment when this is not justified, and finding other ways of paying for it.

António Neves also proposed cost reduction by freezing recruitment, restructuring management positions, and introducing flexible working hours.

In addition to these internal measures, the TACV board is negotiating a capital increase from the Government and a rescheduling of the company’s debt. (macauhub)