BY ANDREW KUNAMBURA STRUGGLING flag carrier Air Zimbabwe (AirZim) might regain its wings to fly internationally after a Netherlands-based company, Knighthood Capital (Knighthood), recently tabled an offer to partner the airline in a deal which, if successful, will see the company facilitating the parastatal’s access to leased planes.
The Zimbabwe Independent has established that Knighthood executives were in the country last month and held a series of meetings with senior officials from the Ministry of Transport and Infrastructural Development, culminating in a briefing by Transport minister Joel Biggie Matiza to President Emmerson Mnangagwa on June 27.
They also held meetings with AirZim executives.
The briefing, held at Mnangagwa’s Munhumutapa offices was also attended by minister of State for Presidential Affairs in charge of Implementation and Monitoring Joram Gumbo, AirZim board chairperson Patrick Chinamasa and senior officials from the Ministry of Transport.
Chinamasa confirmed the developments this week but declined to give details, saying they were being kept under wraps at the request of Knighthood.
“I can confirm that there has been contact from that company. They were here last month and we held meetings with them, but it would be premature now to give details as negotiations are still ongoing. We will disclose them at the right time,” Chinamasa said.
AirZim spokesperson Tafadzwa Mazonde also confirmed the development this week, but would not give details.
“They made presentations to government and us. It’s the usual stuff which investors propose but we cannot say much at this stage,” he said.
Transport minister Joel Biggie Matiza and the ministry’s permanent secretary Amos Marawa did not respond to questions emailed to them over the issue this week.
Government sources said Mararwa has ordered ministry officials not to disclose information on the deal after Knighthood requested confidentiality.
However, a senior government official who attended the briefing said Knighthood had offered a deal to arrange for leased planes for AirZim, as well as to reopen international routes.
“We were called to a briefing in which Knighthood tabled its offer before the President. Basically, they are looking for an investment partnership in which they can assist AirZim to lease planes which will enable it to resume international flights. As government, we told them they were welcome to submit their written proposals and we also availed to them AirZim related information which they took with them back to their country. We expect to hear from them anytime soon,” the senior government official said.
It is yet to be seen if, after studying the AirZim situation, Knighthood will commit itself to doing business with Zimbabwe, especially given the parastatal’s high level of debt. The sinking flag carrier’s current debt stands at approximately US$387 million, roughly the price of a brand new Boeing 777 or an Airbus A340 jetliner.
Previously, negotiations with several airlines, which government had wanted to partner with AirZim, collapsed due to the severity of AirZim’s debt situation.
A government official said this week: “In 2017, cabinet approved the recapitalisation plan for AirZim. After the approval, we went around to negotiate with at least 12 airlines which included two African airlines, Ethiopian Airlines and Kenyan Airways. We also targeted Air Malaysia, Lufthansa, Qatar Airlines, Turkish Airlines, Emirates Airways, Qantas Airways, Singapore Airways and China Air, but we discovered that we were not going to succeed in our negotiations because AirZim’s financials are in shambles and they were not attractive to any one of the airlines to try and go into partnership with us. So it is yet to be seen if anyone is prepared to take the risk now.”
The developments come at a time AirZim just emerged from reconstruction, with administrator Reggie Saruchera, recommending, in a report, that government should assume the parastatal’s US$387 million debt.
Debt assumption is a type of debt refinancing involving three parties, namely the creditor, the original debtor, and a new debtor who assumes the debt obligation, in this case the government.
Knighthood was established in 2017 by James Hogan, who recently served as president and CE of the Etihad Aviation Group, which he built into a US$20 billion enterprise, achieving the mandate from his shareholders of building a world-class diversified aviation and travel group.