Air Zim in recapitalisation drive

20 Mar, 2020 - 00:03 0 Views
Air Zim in recapitalisation drive

eBusiness Weekly

Martin Kadzere and Michael Tome
AIR Zimbabwe says it has not banged doors for potential suitors after the State-owned airline rejected bids from short-listed investors early this year, an official said.

The national airline, under reconstruction, short-listed three potential investors last year, which had shown interest to acquire the struggling national flag carrier, but failed to provide proof of funding, resulting in the cancellation of investment bids.

The three short-listed were out of 10 that had submitted the bids. Assistant administrator Tonderai Mukubvu told Business Weekly on Tuesday that its doors remained open for interested suitors, with some having already made formal enquires.

Air Zimbabwe, saddled with huge foreign and domestic debts, is one of the state-owned entities that were listed for privatisation to ease spending pressures on the fiscus.

“The issue of strategic partners is not yet out . . . there are interested parties who were initially outside of the short-listed. “They (now) say they have seen that Government is really serious about the Air Zimbabwe turnaround so we are in talks with them,” said Mukubvu.

“Government has kept an open mind about Air Zimbabwe and it is taking advise from the experts of the aviation industry on how best to run this particular business.”

Air Zimbabwe is operating one aircraft plying domestic and regional routes and is planning to increase the frequency of the flights in the next two months once it brings on board its Boeing 737-200 and Embraer ERJ145 undergoing D and C check respectively.

Air Zimbabwe in planning to lease the two long-haul Boeing 777–200 ERs acquired from Malaysia to give it time to re-establish strong domestic and regional network. The revenues from leasing the planes will also help Air Zimbabwe to raise funds to acquire smaller planes to service domestic and regional routes.

The B777-200ER is a long haul aircraft, which at best performance can fly a minimum of 10 hours. Mukubvu said it was profitable to lease the planes at the moment than rushing to establish international routes, which are too expensive to develop.

Since route development is too costly in initial stages, Mukubvu said leasing the planes would allow Air Zimbabwe to self-recapitalise as it can generate as much as between US$300 000 and US$400 000 per month.

“Government has not made any decision on the final lessee, but we have nine suitors that have shown interest,” said Mukubvu.

“We are at an advanced stage of discussions with all suitors and they all seem capable to lease the planes from a financial capacity perspective. Proceeds from the lease of the aircraft will be directed towards the acquisition of narrow bodied aircraft that will assist in strengthening domestic and regional network.”

Mukubvu said the process (of searching for lessee) would have reached closure much earlier but the ongoing Covid-19 scare was slowing down the process.

Air Zimbabwe Holdings was placed under reconstruction in terms on October 5, 2018 under reconstruction of state — Indebted Insolvent Companies Act. Zimbabwe is operating with a single plane, mainly servicing Harare – Bulawayo and Victoria Falls route as well as Harare-Johannesburg and Harare-Dar es Salaam routes.

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