'Govt ready to cede AirZim stake'

HARARE - Goevrnment says it is ready to part with its majority shareholding in struggling national carrier, Air Zimbabwe (AirZim).

Investment Promotion minister Tapiwa Mashakada said 76 percent equity was up for grabs as solutions are sought to turn around the airline’s fortunes.

“We are desperately looking for strategic partners to take equity in Air Zimbabwe and government says its prepared to remain with as little as 26 percent, with the partner taking up the majority,” he told a KLM Airlines delegation.

“KLM what are you waiting for? I hope before you leave, you will have some homework.”

KLM’s vice president, Pieter Bootsma said the global carrier was ready to work with the local airline.

“If Air Zimbabwe is back in the air, we are ready to cooperate and look at a strategic partnership with it,” he said.

Indigenisation minister saviour Kasukuwere however, rubbished Mashakada’s statement when asked if his ministry would be flexible to allow a technical partner to take a controlling stake in the national carrier.

“It’s better if you ask him since he is the one that said it.I am not aware of that but as you know those are his feelings and we are not guided by feelings but policy,” he said.

LAM Mozambique which recently made a comeback to the country’s skies, after a 13-year absence hinted that it would also be pursuing a partnership with AirZim.

Air Zimbabwe has for some time now been seeking a strategic partner to restore viability of its operations lost during a decade of economic meltdown.

The national flag carrier is hamstrung with an estimated debt of $149 million, $30 million of which is owed to international institutions.

LAM which is flying a Bombardier aircraft on the Maputo–Harare via Beira route said the company was seeking a code sharing agreement with AirZim, a position confirmed by Transport permanent secretary, Munesu Munodawafa.

 “I am advised that LAM and Air Zimbabwe are already engaging each other on a code sharing arrangement.
“I urge Air Zimbabwe to ensure that the negotiations are concluded as soon as possible. Air Zimbabwe has the full backing of government in this regard.”

It is envisaged that by end of this month, the code sharing arrangement will be in place.

Economist Anthony Hawkins has however, been quoted saying while privatisation of AirZim was the way to go, securing an investor was no easy task as the debt ridden company had no value for an investor.

Hawkins said the decision to create a new debt-free company was noble, but not enough to turn the struggling airline’s fortunes.

 “We may be debt free, but who is going to pay the staff and who is going to assume that debt. That debt is still going to have to be met someday, clearly by government at some point,” he said.

“Clearly, you clean the balance sheet which is what they have done and try and start again, but to start again you need a buyer of some sort.”

Kasukuwere’s ministry has been pushing a controversial indigenisation policy that requires foreign companies to cede a controlling 51 percent stake to locals.

Despite assurances that new investments will be exempted from the regulations, policy inconsistences will likely hamper the airlines chances of clinching a deal.

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