Zimbabwe seeks to seize SAA's assets

Zimbabwe’s Environment Ministry plans to attach South African Airways' (SAA) assets in that country for allegedly owing $2.4m in unpaid fees even as the Zimbabwean Government owes the airline $59m in non-interest bearing blocked funds. About $62m in revenue that SAA earned in Zimbabwe has been blocked since 2016 due to foreign exchange repatriation challenges in Zimbabwe at that time, a Business Day report says. For the past three years, SAA’s management has liaised with the Reserve Bank of Zimbabwe and its Finance and Economic Development Department to try to unblock the funds. SAA last week said it had reached an understanding with Zimbabwe’s Permanent Secretary of Finance & Economic Development on various repayment arrangements. However, Zimbabwe’s Environment Ministry has now raised a claim of about $2.4m for what it claims to be unpaid ‘meteorological weather service fees’ between 2006 and 2014. SAA claims it has already in November 2023 paid $877 435 towards this debt. Nevertheless, the Environment Ministry proceeded with legal action and obtained a court order against SAA for $1.6m. Furthermore, on 8 October 2024, the Ministry obtained a writ of execution against SAA’s property in Zimbabwe. SAA is fighting back against the claim for unpaid fees and has informed Zimbabwe’s Finance Department that this is seen as ‘a malicious and unnecessarily disruptive action’ by the Environment Ministry as the Zimbabwe Government owes SAA a much larger amount. SAA has proposed that the debt due to the Ministry be offset against the blocked funds, though the Ministry appears to have declined this and wants to proceed with the writ of execution.

Fin24 reports that SAA is considering selling its landing rights at major international airports, including Heathrow Airport in London, Parliament's Financial Oversight Committee heard. This follows the collapse of the controversial Takatso deal earlier this year, after three years of negotiation. Plans to sell a controlling stake in SAA to the Takatso Consortium had been announced in 2021 in a bid to halt billions of rands' worth of taxpayer-funded bailouts. During a briefing of Parliament's public accounts committee (Scopa), Transport Minister Barbara Creecy said the beleaguered airline was ‘debt-free’ and would focus on securing a new equity partner. ‘We need a capital injection for (SAA) to return to (its) former glory. This could be a development finance institution, if there is interest and appetite; or another airline, if there is interest and appetite. ‘However, at the moment, we do not have any interest on the table,’ Creecy told MPs. Slots at Heathrow are considered extremely difficult to come by and have historically fetched eye-watering prices, notably Gulf carrier Oman paying $75m in a 2016 deal with Air France-KLM. However, the Civil Aviation Authority has in recent years ordered Heathrow to lower its landing charges. SAA previously sold one of its prime Heathrow slots in 2012. SAA currently has a fleet of 16 aircraft, which it aims to grow to 21 next year. It also recently announced the addition of international outstations, including Mauritius, Perth in Australia, and São Paulo in Brazil. Hanekom said the airline was approaching commercial banks for a small loan facility to provide emergency cash reserves for so-called black swan or unanticipated events such as bird strikes on planes. The loan will, however, not be used for any ongoing operations and has not been budgeted for in the corporate plan.