Viva Macau: Gov’t loan ‘last on creditor list’

Viva Macau refused to repay the first instalment of a Government loan in order not to ‘favour one single creditor,’ the carrier’s lawyer David Mourão said

Failed local low-cost airline Viva Macau has refused to repay MOP 40 million, the first instalment of a MOP 200 million Government loan, because “we could not favour one single creditor”, the carrier’s lawyer David Mourão told the Macau Daily Times.
“The [Industrial and Commercial Development] Fund is not a preferential creditor,” he said.
On August 23, two weeks after it failed to meet a second deadline, Viva Macau was notified that the five promissory notes it had signed to secure the Government loan were being called due by the Fund. Three days later the airline replied to the public notary, stating that it had already filed for bankruptcy.
Furthermore, Viva Macau admitted that it didn’t have enough funds to repay all its creditors, Mourão explained. But, “even if we had that capital we couldn’t proceed with the repayment [to the Government],” he stressed.
The Industrial and Commercial Development Fund is just one in a long list of Viva Macau creditors, which includes Air Macau, fuel suppliers and thousands of ticketholders. The creditors’ general meeting is scheduled for September 13 and 14.
To repay the Government loan would be unfair to all the other creditors, also waiting to get their money back, Mourão emphasised. Moreover, the lawyer added, the Fund is not a preferential creditor. The priority goes to the former workers of Viva Macau and the Government “comes last on the creditor list,” he said.

‘Dishonest’ decision

Even if the Fund takes the case to court, the MSAR law states that all executions will be suspended because Viva Macau filed for bankruptcy, Mourão explained. Besides accepting the carrier’s request to convene a creditors’ general meeting, the Court of First Instance has even nominated an administrator.
As such, the lawyer criticised the Government’s decision to push with legal procedures as “a bit dishonest, considering there is a creditors’ meeting coming up”. According to Mourão, this behaviour can only be explained as a response to “public opinion pressure”.
He also said that four of the five promissory notes signed by Viva Macau to secure the loan have already expired. All five notes were payable at sight and issued with a one-year expiration date but “more than a year has gone by,” Mourão explained.
“The Government should have been cautious but it wasn’t,” the lawyer stressed. “You should never include on a promissory note an expiry date or a payable at sight clause. Any graduate fresh out of Law school knows that and the Government’s legal advisors should too,” he said.
Viva Macau was grounded last March because it was unable to settle its fuel bills and in April the Civil Aviation Authority revoked its operation certificate. On August 9, the main shareholders of the airline, which are also the loan guarantors, failed to meet a second deadline to repay the first instalment of a MOP 200 million Government loan. A day later, an Economic Services Bureau spokesperson told MDT that the Fund had engaged a lawyer to start legal procedures against Viva Macau.