CAMAIR-CO NEARS BANKRUPTCY DUE TO ITS RECENT LOSSES

Source: www.africanakua.com | Ngwenekome Priscilia Ahone, Cameroon

The Cameroonian airlines company Camair-Co might resolve to a dissolution due to the swelling losses it has recorded since 2015, ranging from 16.2 billion FCFA and 14.2 billion FCFA respectively in 2015 and 2017. Authorized sources also stated that this company had a negative equity in 2017 that amounted to 57.1 billion FCFA.

Due to these surmounting losses, a specialist suggested that Cameroon government who owns Camair-Co should decide on early dissolution of the company, which is within the meaning of Article 664 of the OHADA Uniform Act on Company law and Economic Interest Grouping (EIG). This article states that a company can reduce its capital at the end of the 2nd financial year if the dissolution has not been pronounced after successive losses, which should be equal to the amount of losses that have not been offset against reserves. This can work in a scenario where shareholders’ equity has not been rebuilt to half of the share capital within the period of losses. 

According to Business in Cameroon, an analysis of the problem proved that the government does not have plans of dissolving Camair-Co, even if the company’s financial condition allows it. It instead has plans of venturing other solutions while trying to reduce the Company’s capital which is in compliance with the Ohada Uniform Act.

In a bid to attempt other solutions, the state intends to respect the previous plan proposed in 2016 by Boeing Consulting, which is to pump 6 billion FCFA into Camair-Co. Other measures include the clearance of a debt that is over 30 billion FCFA and adding 60 billion FCFA for the growth of the company.

It should be noted that funds were kept for the launch of the company’s freight activity, reinforcement of its fleet to 12 aircrafts and setting up an aircraft maintenance system in Douala, to avoid subcontracting abroad that was regarded as too expensive.

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