Maravi

Harare court orders seizure of Air Zim movable assets

Harare court orders seizure of Air Zim movable assets
By Kingsley Kaswende in Harare, Zimbabwe
Thu 11 Nov. 2010, 04:00 CAT

THE Harare High Court has granted Air Zimbabwe workers an order to seize and auction the airline’s movable assets over a US$500,000 debt they are owed in unpaid dues.

The High Court Registrar has directed the Sherriff’s office to attach the struggling airline’s movable assets at its headquarters at Harare International Airport after 200 employees approached the court seeking an order compelling the airline to pay them November and December 2009 salaries and bonuses, estimated at US$1.5 million.

The airline has so far tried to pay some of the money and was remaining with about US$500,000.

“You are required and directed to attach and take into execution the movable goods of Air Zimbabwe Holdings (Private) Limited . . . of Harare Airport and of the same cause to be realised the sum of US$477,310,62. Further, pay the said applicant or his legal practitioner the sum due to him with costs,” reads the writ of execution from the High Court Registrar to the Sheriff for Zimbabwe or his lawful deputy dated November 5, 2010.

The Sheriff is said to have visited Air Zimbabwe offices last Friday to assess the value of the movable properties set to be auctioned.

It could not be established if the property included any of the planes.
Air Zimbabwe chief executive Dr Peter Chikumba declined to comment on the issue, saying it was an internal matter.

The airline, struggling under the burden of undercapitalisation, a huge debt, poor load factors and foreign currency shortages, has a salary backlog of about US$3 million as of September 2010.

The airline currently has a US$30 million debt, and the government has been forced to give up some of its shareholding in order to raise capital for it.
Last year, the airline sought to retrench 500 of its 1,500-strong workers but the move was blocked by the country’s Labour Court.

Currently, the Zimbabwean government is seeking to surrender up to 60 per cent of the struggling airliner, which it currently wholly owns.

The airline needs US$750 million to renew its fleet and to overhaul its hanger fire system, and any willing partner who avails the money may either assume 60 per cent equity or provide it as a loan.

Of all parastatals that were propped up by the Zimbabwean government until January 2009 when it stopped, Air Zimbabwe turned out to be the biggest financial gobbler, using up between US$3.7 million and US$4.5 million every week.

In 2008, the airline spent not less than US$95 million from the Reserve Bank of Zimbabwe.

Its annual passenger numbers have dropped from a peak of one million in 1996 to just about 300,000 now, according to company records.

The company has also been hit hard by the national brain drain as experienced personnel such as engineers and pilots are poached by rival carriers in the region and Europe.

Most of the airline’s financial woes are attributable to the losses it made when it was forced by the government under its strict price controls to sell its tickets in the worthless Zimbabwe dollar when hyperinflation officially peaked 231 million per cent.

The airline has often had a bone to chew with the airline regulation body, the International Air Transport Association (IATA) for failure to meet its obligations.

Of late, however, it has sought to rise from the shadows by purchasing planes and discontinuing its unprofitable routes to concentrate on viable ones such as Congo DR, South Africa, Britain and Zambia.

Labels: AIR ZIMBABWE, COURTS

posted by MrK @ 6:15 PM