After five months of negotiations, shareholders and key executives representing LIAT and Caribbean Star completed the merger agreement between the former competitors. The announcement was made following a meeting held yesterday in Antigua between the Prime Ministers of Antigua & Barbuda, Barbados and St. Vincent & the Grenadines, primary shareholders of LIAT, and Sir Allen Stanford, sole shareholder of Caribbean Star Airlines. Related Story

Under terms of the merger agreement, the Stanford Financial Group will lend the LIAT shareholder governments a total of US$55 million for the purpose of liquidating LIAT's financial liabilities, as well as to provide working capital. The loan will be repaid to the Stanford Financial Group from the proceeds of an Initial Public Offering (IPO), which will be executed by an agency of the Stanford Financial Group within 24 months of the completed merger. LIAT's primary shareholder governments have also agreed to guarantee the US$55 million loan as follows: Barbados – US$30 million, Antigua &Barbuda – US$20 million, and St. Vincent & the Grenadines – US$5million.
Ownership of the new airline will be split among the current shareholders and LIAT staff as follows: Caribbean shareholder governments and other LIAT shareholders – 60%, Stanford FinancialGroup – 35%, LIAT staff – 5%.
From its base in St John's, Antigua, Caribbean Star serves 12 gateways within the region with 637 weekly flights. The carrier operates a fleet of 11 aircraft. LIAT, operates to over 19 destinations in the Caribbean linking the archipelago from the Dominican Republic to the Guyana in South America. The two currently have in excess of 186 flights per day using Bombardier Dash 8 equipment. Between them, they operate 30 aircraft across the region.