Govt takes over AirZim debt

HARARE - Government has assumed Air Zimbabwe (AirZim)’s debt under the controversial Reconstruction of State-Indebted Insolvent Companies Act.

The Act allows the State to take over assets of businesses deemed to be insolvent and incapable of servicing loans and charges owed to State institutions and agencies.

The reconstruction order in relation to AirZim (Private) Limited and Air Zimbabwe Holdings (Private) Limited comes as the struggling flag carrier has for years been saddled with a huge foreign and domestic debt, estimated at $341 million as at December 2017.

Justice, Legal and Parliamentary Affairs minister Ziyambi Ziyambi gave notice in Friday’s Government Gazette of the reconstruction order.

In the gazette, Ziyambi said “in terms of the Reconstruction of State-Indebted Insolvent Companies Act, he intends to make an application to the High Court, in chambers seeking an order confirming the reconstruction order.

“The minister further gives notices that the documentation in support of the application may be collected by any party interested in the application from the Attorney-General’s office, fourth floor, new government complex, during normal working hours,” the notice reads.

Ziyambi appointed Edwin Zvandasara to be the administrator of the companies under reconstruction.

Zvandasara will be assisted by assistant administrators who include Allowance Sango, who shall be assistant administrator for AirZim (Private) Limited; and Angelina Karonga who shall be assistant administrator for AirZim Holdings. AirZim is one of the many state-run companies that are haemorrhaging due to mismanagement and government interference.

It is, however, not the first time that the reconstruction order has been used to bail out companies. In 2005, the reconstruction law was used to seize Shabanie and Mashaba Mines (SMM) in Zvishavane.

The companies were later to ground to a halt in 2008, three years after government seized them from businessman Mutumwa Mawere, under the controversial reconstruction law.

The self-exiled businessman lost control of SMM after government accused him of pillaging the company’s coffers to pay for his shares previously held by Turner and Newall plc, an accusation he strenuously denies.

The mines were subsequently placed under the Zimbabwe Mining Development Corporation, which has been looking for an investor to put up $140 million required to re-open the mines.

SMM at one time was the world’s sixth largest asbestos producer with an annual output exceeding 140 000 tonnes.

The mothballing of SMM mines has seen workers being paid a paltry $50 a month and students moving into SMM houses in a bid to provide liquidity to the shuttered mines.

In May last year, then Mines minister Walter Chidakwa told Senators that Treasury would soon inject $15 million to resuscitate SMM. Chidakwa also said that his ministry had secured asbestos markets in Russia, Kazakhstan and India.

However, a year on, nothing has come out of it.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.