The Malawian government this afternoon announced that a liquidator had been appointed for Air Malawi Ltd (QM) in order to facilitate the speedy settlement of its debts and liabilities as it moves ahead with the restructuring of the struggling national airline. Additionally, a short-list of possible investors has also been announced with Ethiopian Airlines, and twice shy suitor Comair Ltd in the running. |
| Air Malawi's once prolific network (TTI) |
In September, the Government of Malawi, through its Privatization Commission, sought expressions of interest for a competent strategic equity partner (SEP) to acquire new shares in Air Malawi through a recapitalization scheme. To sweeten the deal, the government undertook to honour all the liabilities of airline said to amount to USD50million.
The Privatisation Commission's (PC) Chief Executive Officer Jimmy Lipunga said that a partner at audit and business
advisory firm Deloittes, would oversee the transfer of assets
from Air Malawi Limited to a new investment vehicle called "Air Malawi (2012)
Limited."
“Investors will scarcely agree to invest in an entity that is technically insolvent due to indebtedness. The assets of Air Malawi Limited will, therefore, be hived off and will be transferred into Air Malawi (2012) Limited,” said Lipunga, flanked by the flag carrier’s CEO Patrick Chilambe and PC director of project investment Charlie Msusa.
In this context, "Air Malawi Limited" excludes its wholly owned subsidiaries; namely
Air Cargo Limited and Lilongwe Handling Company Limited. The
subsidiaries will subsequently be decoupled from Air Malawi Limited
through a separate Government sanctioned restructuring exercise to be done at a later stage.
Local Malawian companies listed thus far who have expressed interest are:
- Africa Star Airways Limited,
- Air Express Limited,
- Alpha and Omega Duty Free Shops,
- CDH Limited,
- Global Airlines,
- Jetlink Airways Limited,
- Mpatsa Holdings
Foreign companies seeking the partnership are:
- Comair Limited (South Africa),
- Fly Africa (South Africa),
- Ethiopian Airlines (Ethiopia),
- Globe Business Network (Botswana)
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| Air Malawi's famous VC10: a common sight in 1970s London. |
According to the terms of the investment vehicle, the Strategic Equity Partner (SEP) should be a consortium or consortia of investors comprising at least a reputable airline operator, and a financial investor and Malawian Nationals. However, due to the terms of its Bilateral Air Service Agreements (BASAs), the shareholding attributable to Malawian Nationals within the SEP, plus the remainder of Government's shareholding in Air Malawi, should amount to at least 51 %. Hence a 49% stake is at hand for foreign investors.
For Ethiopian Airlines and Comair Ltd, Air Malawi represents a crucial step in their individual plans for expanding into Africa. Comair Ltd, are a twice denied suitor of Air Malawi; South African Airways too, have shown interest in the carrier in the past, whilst Ethiopian Airlines have recently been scouting for opportunities in the area as it looks for a potential southern/central African hub for a possible regional carrier akin to its successful ASKY Airlines venture in Togo.
