Business / Companies
Air Zimbabwe assets set to get immunity
12 Sep 2015 at 09:04hrs | Views
Police details with sniffer dogs search the interior of a Boeing 767 at Joshua Mqabuko Nkomo International Airport in Bulawayo yesterday after a bomb hoax had been raised through a note left in the plane
THE government is coming up with a law granting the troubled Air Zimbabwe a three-year immunity from attachment and execution of its properties over debts owed to different creditors. The proposal is contained in the Finance Bill, 2015, set to be tabled before Parliament, which will resume sitting next Tuesday.
President Mugabe will deliver the opening speech setting the agenda for the august House. Clause 23 of the Bill stresses the need to protect the national airline's assets to foster recovery. "In order to protect the assets of the Air Zimbabwe or its successor company from attachment by its creditors, it is proposed to extend to it the provisions of the State Liabilities Act (Chapter 22:13)," reads part of the Bill.
It, however, said the protection will only be "temporary" to enable the company to repay its creditors in an orderly fashion. If approved, the waiver will expire on July 31, 2018. The national carrier needs about $1 billion to recapitalise, with $298 million required to service both its domestic and foreign debts, which emanated from navigation, landing, handling fees, fuel supplies, salary arrears and rentals.
The parastatal has accumulated debt of up to $12 million in handling fees to state owned cargo handler, National Handling Services (NHS) alone, dating back to 2009 when NHS was still a subsidiary of Air Zimbabwe.
NHS was unbundled from the national airline in 2012 to improve operational efficiencies. The government has since approved plans for Air Zimbabwe to engage a strategic partner and also to takeover its debt. Air transport is strategic in the growth of the economy particularly in the tourism and hospitality sector.
The national airline, however, struggles to make ends meet due to funding and technical constraints , which has seen private players such as Flyafrica and foreign airlines taking over servicing of its traditional routes. Scores of companies including other state entities continue to lose properties to litigation over debts to workers and other service providers.
Recently the Cold Storage Company (CSC) had its 400 herd of cattle auctioned while other properties have been attached over debts. Last week the High Court had to intervene in the Reserve Bank of Zimbabwe (RBZ)'s favour when it ruled that creditors owed by the central bank should wait for payment instead of rushing to attach its property.
Justice Tendai Uchena made the proposition while removing five RBZ immovable properties from attachment over a $2,1 million debt. In 2008, RBZ ordered 60 tractors from Farmtec Spares and Implements at the height of the farm mechanisation programme worth $2,3 million, but failed to pay.
The company successfully sued the apex bank but Justice Uchena last week agreed with the RBZ's lawyer that Advocate Lewis Uriri that the bank's property belongs to the State and was protected in term of the State Liabilities Act.
President Mugabe will deliver the opening speech setting the agenda for the august House. Clause 23 of the Bill stresses the need to protect the national airline's assets to foster recovery. "In order to protect the assets of the Air Zimbabwe or its successor company from attachment by its creditors, it is proposed to extend to it the provisions of the State Liabilities Act (Chapter 22:13)," reads part of the Bill.
It, however, said the protection will only be "temporary" to enable the company to repay its creditors in an orderly fashion. If approved, the waiver will expire on July 31, 2018. The national carrier needs about $1 billion to recapitalise, with $298 million required to service both its domestic and foreign debts, which emanated from navigation, landing, handling fees, fuel supplies, salary arrears and rentals.
The parastatal has accumulated debt of up to $12 million in handling fees to state owned cargo handler, National Handling Services (NHS) alone, dating back to 2009 when NHS was still a subsidiary of Air Zimbabwe.
The national airline, however, struggles to make ends meet due to funding and technical constraints , which has seen private players such as Flyafrica and foreign airlines taking over servicing of its traditional routes. Scores of companies including other state entities continue to lose properties to litigation over debts to workers and other service providers.
Recently the Cold Storage Company (CSC) had its 400 herd of cattle auctioned while other properties have been attached over debts. Last week the High Court had to intervene in the Reserve Bank of Zimbabwe (RBZ)'s favour when it ruled that creditors owed by the central bank should wait for payment instead of rushing to attach its property.
Justice Tendai Uchena made the proposition while removing five RBZ immovable properties from attachment over a $2,1 million debt. In 2008, RBZ ordered 60 tractors from Farmtec Spares and Implements at the height of the farm mechanisation programme worth $2,3 million, but failed to pay.
The company successfully sued the apex bank but Justice Uchena last week agreed with the RBZ's lawyer that Advocate Lewis Uriri that the bank's property belongs to the State and was protected in term of the State Liabilities Act.
Source - chronicle
