INSOLVENT flag carrier Air Zimbabwe is failing to attract an investor, 11 months after government invited bids from potential suitors to take over the embattled entity, the Zimbabwe Independent can report.
Grant Thornton, the administrator tasked with overseeing the process of returning the debt-ridden Air Zimbabwe to profitability, confirmed that no progress had been made in getting a new partner for the airline.
Moreover, government has also failed to regularise Air Zimbabwe’s US$381 million debt assumption plan which continues to weaken the airline’s chances of courting new partners.
“I do not have an update. I have no progress to tell you. If there is something, we will tell you,” assistant administrator Tinashe Mawere this week told the Independent
“I do not want to comment any further on this in case I say things that might result in another story.”
President Emmerson Mnangagwa appointed Patrick Chinamasa as AirZim board chairperson in June. Government is yet to appoint a board, months after former Transport minister Joram Gumbo fired the Chipo Dyanda-led board.
The airline attracted 10 potential investors this year, but they have been spooked by the company’s legacy debts.
Grant Thornton has previously insisted that debt assumption would boost the company’s turnaround strategy as most investors were demanding a clean balance sheet.
The airline has been engaging the Ministry of Finance to finalise the debt assumption process which has stalled the process of finding a new partner.
Air Zimbabwe administrator Reggie Saruchera in June said the airline’s debt takeover had been approved by cabinet long back, although there was no movement in that regard.
“The debt issue had already been approved in 2012, but nothing has happened since then. We have gone back to government and said, ‘cabinet, please approve the debt takeover so that the reconstruction process can begin in earnest’,” Saruchera said then.
In November last year, AirZim urged interested parties to invest in the moribund airline before a crunch meeting with creditors who demanded prompt payment. Before the company was placed under reconstruction last year, creditors including former employees, airlines, insurance companies and other service providers had been pushing for legal action against the airline.
Reconstruction cushions the troubled airline from litigious creditors seeking to attach property. AirZim has is in the past indicated that its defunct aircraft will be auctioned to service part of the debt.
Of the US$381 million debt, US$30 million is owed to foreign creditors, while US$292 million is government-to-government debt.