Air Namibia faces liquidation over Challengair debt default

An old debt to Belgium’s bankrupt Challengair (1I, Brussels National) may eventually catch up with Air Namibia (SW, Windhoek Int’l) as the liquidator of the charter company has applied to have the cash-stricken flag carrier liquidated in the Namibian High Court. The application is scheduled to be heard on October 26, 2020, confirmed Sisa Namandje, Director of Windhoek law firm Sisa Namandje & Co, who is presenting Challengair’s Belgium liquidator, Anicet Baum. He confirmed to ch-aviation that Challengair’s application follows on Air Namibia’s failure to pay monthly instalments on a settlement of NAD400 million Namibian dollars (USD24.2 million) to Challengair. The settlement results from a longstanding dispute over Air Namibia’s lease and maintenance of a B767-300(ER) from Challengair in 1998. Namandje declined to comment further as the matter was sub judice. The Namibian Sun reported that Challengair in 2008 had obtained a judgment from a German court, which ordered Air Namibia to pay it USD6.5 million for unpaid rent, maintenance and insurance of the aircraft. In another judgment in July 2011, Air Namibia was ordered to pay another USD13 million in interest on the outstanding debt. Late last year, the Namibian government provided a guarantee of NAD578 million (USD34.9 million) to allow the national airline to borrow money from commercial banks and keep Challengair from effectively attaching two Air Namibia A330-200s leased from Castlelake and used on the Frankfurt Int’l route. Although the airline does not own the aircraft, Challengair can pursue the fuel they take on board in Germany effectively grounding the aircraft there. “Air Namibia, after paying part of the instalments, has since regrettably and materially breached the agreement by failing to pay the remaining monthly instalments. It is therefore very clear that Air Namibia is not able to pay its debts as they fall due, a fact which it has readily admitted,” Challengair said in court papers filed. It claimed Air Namibia’s liquidation was in the public interest as the airline was in “deep commercial insolvency” and that government assistance was not forthcoming.