Business / Companies
Air Zimbabwe in shambles, difficult to find takers: Minister
17 Jun 2011 at 06:13hrs | Views
State Enterprises and Parastatals minister Gorden Moyo on Wednesday told the Parliamentary Portfolio Committee on State Enterprises and Parastatal Management that finding an investor to buy the ailing national airline, Air Zimbabwe, was likely to prove a mammoth task.
Air Zimbabwe is in such shambles and its financial position so hopeless it would be difficult to find takers even if the government decided to offload it, Moyo said.
Moyo was responding to a question by Chiredzi North MP, Ronald Ndava, a member of the Portfolio Committee who had asked him to explain why his ministry was not disposing of loss-making parastatals that were draining the fiscus.
Moyo said there are certain entities where he thinks government should be out of but it may not be easy to sell Air Zimbabwe right now even if you want to offload it because you may not find a taker because of its state.
"The difficulties facing Air Zimbabwe are not unique to Zimbabwe as a lot other airlines around the globe were performing very poorly" Moyo said. He cited Zambia Airways as an example.
"It is not just Air Zimbabwe which is suffering, very few airlines are doing business and it might be a big problem to sell Air Zimbabwe. A lot of parastatals are faced with huge debts and this on its own makes our parastatals unattractive to suitors. To get investors investing in a shell is not easy because of this debt overhang," Moyo said.
Moyo indicated that most of the equipment in the country's parastatals was dilapidated and archaic. To get investors to inject funds into businesses that were going under was not easy.
"The fiscal space is also too constricted to inject capital or even expertise into these entities especially given the serious human capital flight Zimbabwe has suffered," he said.
State Enterprises and Parastatal Management deputy minister Walter Chidakwa said the issue of marketability to suitors by ailing parastatals was affected by tariffs.
"The investor looks at prices in Zimbabwe and compares them with those in the world. He looks at whether he will be able to recover his investments and we end up in this dilemma," said Chidakwa.
Air Zimbabwe is in such shambles and its financial position so hopeless it would be difficult to find takers even if the government decided to offload it, Moyo said.
Moyo was responding to a question by Chiredzi North MP, Ronald Ndava, a member of the Portfolio Committee who had asked him to explain why his ministry was not disposing of loss-making parastatals that were draining the fiscus.
Moyo said there are certain entities where he thinks government should be out of but it may not be easy to sell Air Zimbabwe right now even if you want to offload it because you may not find a taker because of its state.
"The difficulties facing Air Zimbabwe are not unique to Zimbabwe as a lot other airlines around the globe were performing very poorly" Moyo said. He cited Zambia Airways as an example.
Moyo indicated that most of the equipment in the country's parastatals was dilapidated and archaic. To get investors to inject funds into businesses that were going under was not easy.
"The fiscal space is also too constricted to inject capital or even expertise into these entities especially given the serious human capital flight Zimbabwe has suffered," he said.
State Enterprises and Parastatal Management deputy minister Walter Chidakwa said the issue of marketability to suitors by ailing parastatals was affected by tariffs.
"The investor looks at prices in Zimbabwe and compares them with those in the world. He looks at whether he will be able to recover his investments and we end up in this dilemma," said Chidakwa.
Source - AlphaMedia
