MERGER talks between flag carrier Air Zimbabwe (AirZim) and the dodgy Zimbabwe Airways (ZimAirways) to create a merged state-run airline have collapsed after a nominee shareholder demanded to be paid US$2 million from government, it has emerged.
BY ANDREW KUNAMBURA
Government announced last month that plans were underway to merge the two airlines under a new strategy aimed at revitalising the country’s moribund aviation industry.
However, sources said the plans went up in smoke after Harare lawyer Phillipa Phillips, who is listed as a ZimAirways director, wrote to the Transport Ministry informing that the merger would not proceed unless she is paid US$2 million for the shares she held in the corruption-ridden carrier.
A nominee shareholder is an ostensible or registered owner who holds shares on behalf of the actual owner (beneficial owner) under a custodial agreement. It was not immediately clear who in this case the actual owner was.
Although Phillips’s letter could not be obtained at the time of going to press, as officials maintained a tight lid on it, senior officials from the Transport Ministry, which was brokering the deal, confirmed the development in off-the-record briefings. They said Transport minister Joel Biggie Matiza, who could not be reached for comment, is now making frantic efforts to salvage the deal.
“She wrote to the ministry demanding a US$2 million payment for shares she claims to nominally hold in the company. So the deal has effectively been called off and that is why government has had to invite private investors to come in,” a top ministry official said.
Phillips refused to comment when contacted by businessdigest this week.
“I do not talk to the press about company issues, so this conversation ends here. Please don’t quote me,” she retorted.
A merger is an agreement to unite two existing companies into one new company. Mergers and acquisitions are commonly done to expand a company’s reach, expand into new segments or gain market share in an effort to create shareholder value.
The development brings yet another turn to the controversial ownership of ZimAirways, which former Transport minister Joram Gumbo in April claimed to be 100%-owned by government.
Before that, Gumbo had said the airline was a private company owned by Zimbabweans based in the diaspora. He said it would be leasing planes from the Zimbabwe Aviation Leasing Company, another government-owned company.
However, there was no documentary evidence to prove his assertion. The two companies’ profiles are missing from the Companies Registry.