Oliver Kazunga, Senior Business Reporter
GOVERNMENT is committed to Air Zimbabwe’s debt assumption as this will facilitate the turnaround of the national airline, a minister has said.
Cabinet this week adopted the principles of the Air Zimbabwe Debt Assumption Bill, which were presented by Minister of Finance and Economic Development, Professor Mthuli Ncube.
The airline was placed under reconstruction in terms of the State Indebted and Insolvent Companies Act in 2018 due to a combination of huge debts, viability problems and a weak balance sheet.
The reconstruction order was to prevent creditors from taking legal action against the airline and attachment of the entity’s assets.
Air Zimbabwe’s debt has been validated as $349 million (local) and US$30 million being foreign.
“Cabinet advises that the principles underpin the drafting of the Debt Assumption Bill for Air Zimbabwe Holdings (Private) Limited and Air Zimbabwe (Private) Limited,” said Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa during a post-Cabinet media briefing Tuesday.
“The Bill is required to allow for the clearance of the airline’s domestic and external debt, followed by the appointment of a new board and new management to run the airline, thus permitting its exit from the reconstruction order.”
The minister said the Bill would provide a framework for debt assumption processes and procedures, validation and reconciliation of the liabilities, debt assumption modalities, terms and conditions of the debt settlement plan, and the recovery plan for the debt paid by Government on behalf of the airline.
The Bill is in terms of the Public Debt Management Act as read with the Statutory Instrument 79 of 2019.
“It is expected that the Bill will ensure revival of the airline and its associated companies from perennial loss-making entities, into enablers of growth in tourism, trade, commerce and the economy in general,” she said.
The Bill also fulfils the airline’s reconstruction order requirement for restructuring of its balance sheet through assumption of the airline’s domestic and external debt, and settlement by the Government.
In January, the airline announced that it will this year focus on route expansion and flying more aircraft as it moves to promote tourism and trade. — @okazunga