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Air Zimbabwe administrator lays out debt settlement plan

by Staff reporter
13 Apr 2021 at 06:40hrs | Views
AIR Zimbabwe (AirZim) has sent out debt settlement agreement proposals to its multitudes of creditors, including over 300 former workers axed as the troubled airline slipped into turbulence in the past few years.

If creditors agree with conditions set out in the paper, this could mark the beginning of settling of a debt of about US$300 million accumulated by the State-run carrier over many years.

The airline entered into administration in 2018 following a difficult decade that saw its planes grounded as the crisis deepened, with foreign airports threatening to impound its jetliners over landing fees.

The crisis at AirZim is in tandem with a regional trend that has seen southern Africa's once high-flying State airlines being liquidated, falling into judicial management or soldiering on under extremely difficult circumstances.

Reggie Saruchera, the Grant Thornton Chartered Accountants boss, was appointed AirZim administrator with the difficult mandate to raise capital, carry out or discontinue any part of the business to make reconstruction successful, operate all AirZim accounts and admit all claims or demands against the airline.

In last week's settlement plan, he said he had completed the verification and validation process that would automatically cancel any security which had been held against the airline.

It was not clear if government had already released funding for the outstanding debts to end a long-running standoff.

Saruchera was not reachable for comment yesterday.

But part of the settlement agreement he jointly signed with AirZim read: "This agreement automatically cancels any security which was held against the airline or encumbrances on its properties and authorises the administrator through the Master of the High Court to immediately cancel any such encumbrances."

"I/we may not rely on any representation that allegedly induced me/us to enter into this agreement, unless the representation is recorded in this agreement. No extrinsic evidence may be relied upon in interpreting the provisions of this agreement.

"This document is the sole record of the agreement entered into by me/us and the administrator and/or the airline regarding the payment of the amount due.

"Any variation of this agreement, or any waiver connected with this agreement, shall be void for all purposes unless, in the case of variation, it is agreed to in writing and signed by or on behalf of the parties, or in the case of a waiver signed by or on behalf of the party granting the waiver.

"This agreement constitutes the entire agreement between me/us and the administrator and/or the airline regarding the payment of the amount owed to me/us and I/we confirm that there are no collateral or supplemental agreements relating to this agreement."

Workers had already been agitated by delays in payment. In December, Saruchera came under pressure to relinquish his role due to "gross maladministration, incompetence, mismanagement and wrongful and illegal deprivation" of salaries to workers fired by the airline six years ago, who the airline had been ordered to reinstate by the courts.

In a landmark judgment delivered on December 7, three Supreme Court judges ordered the national airline to reinstate the workers to the positions they held when they were discharged at the height of the controversial Zuva judgment retrenchments of July 2015.

The judgment gave companies the greenlight to fire workers on short notice.

It triggered wholesale retrenchments across industries, as companies took advantage of the judgment to trim costs and survive a raging economic crisis.

Since the Supreme Court has declared the AirZim retrenchments illegal, a number of companies will find themselves in a dilemma should other affected workers institute litigation.

Source - newsday