(Recasts with government liquidation, adds quote) WINDHOEK, Feb 11 (Reuters) - Debt-laden Air Namibia, which cancelled all flights earlier on Thursday, has been placed into voluntary liquidation, Finance Minister Iipumbu Shiimi said, calling the state-owned airline “unsustainable”. Government said it had considered all other options, which included potential investment from other airlines and turnaround strategies, before it decided to file for liquidation. “The country’s economy, can no longer afford to perpetually provide financial support to Air Namibia at the expense of supporting economic growth and critical social services,” Shiimi said during a news conference. Air Namibia, which employs 644 workers, is buckling under mountains of debt. It has failed to produce financial statements in recent years despite regular state bailouts over the past two decades. “It is therefore important for the nation to understand that the current debt of Air Namibia is unsustainable and will jeopardise the economic recovery plan,” Shiimi said. The government estimates it has spent more than 8 billion Namibian dollars ($547.16 million) on Air Namibia, the minister said. The government said it would pay Air Namibia’s employees the value of one year’s salary, over the next 12 months. In a statement posted on Facebook late on Wednesday, the airline said its was cancelling all flight operations and suspending new bookings from Feb. 11. The airline promised to refund customers. The move to liquidate Air Namibia comes less than two weeks after the airline signed a 10 million euros ($12 million) settlement agreement with Belgian flyer ChallengeAir. As part of that agreement, Air Namibia will pay ChallengeAir 9.9 million euros, beginning with a 5 million-euro payment before Feb. 18 and monthly instalments thereafter until January 2022. Namibia’s Public Enterprises Minister Leon Jooste said the decision to liquidate Air Namibia was not motivated by the problems with ChallengeAir.