St. John's, Antigua -- March 8, 2007 -- The Prime Ministers of the Shareholder Governments of Antigua and Barbuda, Barbados and St. Vincent and the Grenadines met in Antigua with Sir Allen Stanford on 7 March 2007 to finalize negotiations concerning merging LIAT (1974) Limited and Caribbean Star Airlines.

The parties agreed on the following:

1. The alliance between the two companies should take the form of a purchase of Caribbean Star Airlines by LIAT (1974) Limited.

2. The Stanford Financial Group (SFG) will lend the Shareholder Governments the sum of US $55 Million for the purpose of liquidating the financial liabilities of LIAT (1974) Limited, the settlement of all obligations which are necessary conditions of the conclusion of the alliance, and the funding of working capital going forward.

3. SFG will immediately advance the initial loan proceeds, US $11 Million, to LIAT. US $6 Million of this will be used for the purpose of settling the debt to the Export Development Corporation of Canada (EDC) and US $5 Million for immediate use as working capital for the airline.

4. The loan of US $55 Million to Shareholder Governments will be repaid to the SFG from the proceeds of an International Public Offering (IPO) which will be executed in the marketplace by an agency of SFG, within 24 months of the date of the merger.

5. The agreed rate of interest of the loan of US $55 Million will be LIBOR+1 and the repayment of accrued interest and principal will also not be made until after the successful launching of the IPO.

6. Agreement was reached that the ratio of the share ownership in the new LIAT going forward in relationship to assess fair asset value of the two companies will be Caribbean Shareholder Governments and the other shareholders 60%, SFG 35% and the staff of LIAT (1974) Ltd., 5%

7. The ratio of the Guarantee of the US $55 Million loan will be the Government of Barbados US$30 million, the Government of Antigua and Barbuda US$20 million and the Government of St. Vincent and the Grenadines US $5 Million

8. The related legal and financial documentation will be completed within a week of the signing of this agreement

It is envisaged that the agreements reached today, 7 March 2007, will enable the purchase agreement between the Parties to be completed by 31 March 2007.

Source: ab.gov.ag