Liquidator doesn’t want Air Malawi exposed
The liquidator of Air Malawi is not obliged to expose the public and government beyond the amount covered by the undertaking made by government to settle all the liabilities.
The Public Private Partnership Commission (PPPC) chief executive officer Jimmy Lipunga said this on Wednesday in view of reports that the national flag carrier had closed shop due to the restructuring currently underway to find a strategic equity partner.
Lipunga told Nation Online that Air Malawi has been posting significant losses on nearly all the flights. He said to contain public losses and, therefore, requiring treasury to commit more resources, the liquidator with the support of the government has so far merely suspended the flights.
“In line with the mandate by the government, the liquidator will, in the near future, effect the retrenchment of approximately 50 percent of the staff compliment. This was expected. It is our hope that a strategic partner once in place will absorb some of the employees,” said Lipunga.
He stressed that nobody takes pleasure in any retrenchment exercise, adding that it is an unfortunate inevitability of an enterprise running into deep losses.
Lipunga said the PPPC formerly the Privatisation Commission (PC) has involved the services of Malawi Entrepreneur Development Institute (Medi) to counsel all the workers regarding handling the future.
Currently, Air Malawi has grounded all its two flights, ATR 42 and the leased Boeing 737 200.
ATR 42 was grounded last December due to safety concerns, according to liquidator Lekani Katandula, but was worked on and is now ready for service after the company’s engineer worked on it. The aircraft is now packed at Chileka Airport hangar.
The Boeing 737 200 flights were suspended indefinitely on Wednesday.
President Joyce Banda announced, in a statement when opening the 44th session of Parliament last Friday, that there are only three companies that are in contention for strategic equity partnership in Air Malawi.
But Lipunga could not name the companies, arguing that an appropriate announcement will be made next week on the preferred partner after completing the necessary consultations.
“Partial announcement of the results will simply confuse the public. We will announce the preferred bidder at the same time,” he said.
Government recently appointed a liquidator for Air Malawi Limited to facilitate the speedy settlement of debts and liabilities as part of the company’s restructuring process.
The liquidator, according to the Privatisation Commission (PC), will oversee ‘orderly’ transfer of assets from Air Malawi Limited to a new investment vehicle, Air Malawi (2012) Limited.
The assets of Air Malawi Limited were hived off and transferred into Air Malawi (2012) Limited.
The strategic equity partner (SEP) is expected to recapitalise the new investment vehicle based on a new and viable business operational model and the level of participation within the SEP and should bring the participation of Malawian nationals, both with the SEP and government shareholding to 51 percent.
In accordance with the Companies Act, the transfer of assets from Air Malawi Limited to a new investment vehicle can only be achieved through a ‘voluntary shareholder liquidation framework’ enshrined in the Companies Act.
The Malawi Government has already made an undertaking that it will honour all debts and liabilities which are in billions of kwacha.
Some of the companies that are bidding included African Star Airways Limited, Air Express Limited, Apha and Omega, Jetlink Airways Limited from Malawi, Comair Limited, Fly Africa from South Africa, Ethiopian Airlines and Globe Business Network from Botswana.
