Malawi liquidates its national airliner: 11 companies express interest

The operational problems facing Malawi’s flag carrier, Air Malawi are expected to be a thing of the past if  eleven companies that have expressed interest to partner with government in running the company will live up to their word.

A new company has been created, Air Malawi (2012) which will soon pick a investor to help recapitalise the flag carrier.

These include Comair Limited, Fly Africa from South Africa, Ethiopian Airlines Mpatsa Holdings and Globe Business Network from Botswana.

“The government has embarked on a process of restructuring Air Malawi primarily involving the engagement of a strategic equity partner to recapitalise the airline,” Jimmy Lipunga, chief executive officer of the country’s Privatisation Commission, said in a statement.

Air Malawi plane

Air Malawi currently flies only a single aircraft down from about five planes which were detained by creditors in the last decade.

Malawi Government has engaged a liquidator Lekani Katandula, from Deloitt to help for Air Malawi  facilitate company’s restructuring process and  oversee the transfer of assets from Air Malawi Limited to a new investment vehicle, Air Malawi (2012) Limited.

Privatization Commission (PC) chief executive officer Jimmy Lipunga told reporters in Malawi’s commercial capital, Blantyre Thursday that the commission is transferring Air Malawi Limited assets to the new airline through a voluntary shareholder liquidation framework enshrined in the companies Act.

Air Malawi is saddled with a debt of over $50 million, according to airline sources, arising mainly from the grounding of two of its four aircrafts.

The government will settle all of the company’s debts.

“In a bid to protect the rights of creditors, the law requires that the shareholders in the voluntary liquidation scheme guarantee that the concerned entity is solvent and that it will meet all the liabilities,” said Lipunga .

The move follow government’s announcement in September that it has embarked on a restructuring process of Air Malawi Limited through the Privatization Commission by engaging a strategic equity partner to recapitalize the airline which has not been performing to standards.

Meanwhile, Ernst and Young and other players in government, have begun the process of evaluating the expressions of interest, a process that is expected to culminate into the selection of the preferred bidder.

The deadline for submission of enquiries is December 2 2012 with closing date for submission of final bids on December 15 2012, according to Lipunga.

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