By Lavern Clarke, Staff Reporter 
Finance Minister, Dr. Omar Davies at his post-budget press conference yesterday. - Rudolph Brown/Staff Photographer
THE DEAL now being negotiated with Air Jamaica will give back to the Government the majority stake in the airline, Finance Minister Dr. Omar Davies said yesterday, even as he revealed that the Government has assumed more than US$300 million of the airline's debt since it was privatised more than eight years ago.
Government now has a 25 per cent equity stake in the airline, which will increase to 45 per cent under a debt-for-equity swap being arranged with current controlling owners, Air Jamaica Holdings.
But the Government also holds a number of convertible preference shares in the airline, which, together with its increased ordinary shareholding, will give it the larger chunk of the national carrier on completion of the negotiations, according to the Minister.
"The deal will make Government the owner of the airline," Davies said. He later said the talks were likely to be wrapped up by the end of this month.
NO FUTURE IMPACT ON BUDGET
But while the talks centre on swapping Air Jamaica's debt for the Government's increased equity participation in the airline, Davies said Tuesday at his post-budget press conference in Kingston that the deal would have no future impact on the country's budget.
"The Air Jamaica debt will not come onto the budget, per se," said the Minister. "There is no outstanding debt that Government will assume."
Air Jamaica's accounts are not open to public scrutiny, but the airline is operating in the red. It lost US$90 million last year, and has accumulated losses that run into several hundred million dollars.
Since the airline was acquired by Air Jamaica Holdings, a consortium of investors led by Gordon 'Butch' Stewart that bought into the airline in 1994, the Jamaican Government has absorbed some US$300 million of its liabilities.
According to the Minister, the monies were in the form of "revenues foregone", that is, funds that were owed to various Government departments. The Airports Authority of Jamaica revealed this month that the airline owes it $800 million in unpaid fees.
"The airline has financed itself by not making certain payments over to Government," said Davies.
Some of the airline's accumulated losses are a carry-over from its years under Government control, the airline's chief executive, Chris Zacca, said in a previous interview.
Air Jamaica did not respond to queries yesterday on whether the deal could see its present owners giving back operational control to the Government.
