A Hong Kong Investor YAYA Sun is set to invest in excess of US$100 million in a local airliner, Sol Air.
The deal, which had been put on ice owing to the country’s risk profile and airline remittance issues in Zimbabwe, is now set to go through soon.
By Melody Chikono
Last year, the two parties agreed on a US$55 million financing deal that would have seen the airline taking off in the first quarter of 2017, but that failed to materialise.
YAYA Sun then retreated raising concerns about the sanctions issues and foreign payments gridlock in Zimbabwe.
The Civil Aviation Authority of Zimbabwe (Caaz) licensed Sol Air to service domestic and international routes in 2012.
Sol Air MD Nkosilathi Sibanda told businessdigest this week that they were reviving the initiative with timelines for the project commencement expected soon after elections.
While they have reached an agreement with the financiers, Sibanda said one of the major drawbacks have been the governments lacks of understanding for the open sky policy and largely financing have delayed the take-off over the years. He said government was still attempting to preserve certain routes for Air Zimbabwe which is against the international competition laws.
“We have been requested to review our capital requirements from US$55 in-order to have enough working capital. Our advisors have proposed that we seek US$100 million to be on the safe side and our financiers have indicated their willingness to invest that much and a letter of intent have been issued,” he said.
Sibanda said the airline, which has been looking at securing international permits, is now engaging government and should be cleared in the next two months.
“One of the major drawbacks have been government’s lack of understanding of or willingness to consider the open sky policy; they want to preserve certain routes for Air Zimbabwe which is against international competition laws. As for routes we are engaging the government now and should be cleared within the next two months.
“We have a comprehensive network to cover Europe, China and the US, in conjunction with a regional and domestic network. For this business to be viable there must be a critical threshold network and since the industry is capital intensive it can take up to years to start making profit.so someone must have enough capital to cover that period,” he said.
The airline has so far managed to secure five planes from the United Kingdom.