President Emmerson Mnangagwa
Business Editor
DIASPORANS through the Zimbabwe-South Africa (Zim-SA) Forum plan to invest about $800 million into the country targeting mainly agriculture, aviation and mining sectors.
The proposal follows last week’s visit to South Africa by President Emmerson Mnangagwa who met the business community in that country during an oversubscribed luncheon that was organised by the Zimbabwean Embassy.
Air Zimbabwe is likely to be a major beneficiary of the investment talks with an official merger document, seen by The Chronicle, indicating that one of the investors, Fly Modern Ark South Africa, is keen to inject more than $400 million into the ailing national carrier in a strategic partnership. The SA firm seeks to buy 25 percent shares in Air Zimbabwe, which, if agreed, would result in injection of $220 million in new assets, debt clearance and operations funds subject to adjustment, and payment terms. Under the deal, $193 million will be used to acquire 10 new MA60 passenger aircraft and two units MA600F Cargo aircraft at the closing of the transaction. An additional $16.1 million would be injected for training, buying spares, tools and technical support while $10.9 million would be spent on operations, safety and marketing expenses. Sources close to the deal say additional funding of up to $800 million could be mobilised after the successful liquidity assessment has been conducted to cover current shortfalls.
According to the document, Fly Modern Ark South Africa (Pty) Ltd has calculated the merger consideration on the basis of information available to public and on the following assumptions:”
(a) that the firm holds 25 percent shares of the surviving corporation in the merger with Government retaining 75 percent.
(b) that the working capital of the company at the closing of the transaction remains unchanged, and consistently applied. (c) that the merger consideration and capital injection at closing would be increased or decreased based on changes in the Air Zimbabwe’s working capital and projections to render the surviving corporation operations profitable,” reads part of the document.
The separate corporate existence of Fly Modern Ark South Africa is set to operate in South Africa under new management elected by both Air Zimbabwe and Fly Modern Ark, and as a feeder airline to Air Zimbabwe Ltd. Zim-SA Forum president Mr Anele Ndlovu, who is closer to the happenings, confirmed the discussions and said two proposals for the revival of Air Zimbabwe have been submitted to the board for its consideration. However, Transport and Infrastructural Development Minister, Dr Joram Gumbo, could only say: “I’m not yet aware of the issue. We’re hearing so many reports of people saying they have money to invest. It will have to start with the board first”.
Mr Ndlovu said his organisation informed President Mnangagwa during the business luncheon last week that Mpumalanga-based coal miner, Menar Capital, was also keen to open business in the country and has now registered a company called Nzou Resources, which will focus on coal mining and export as well as energy production. He also reported that Tresor, a capital company registered in Mauritius, has now jointly with Mercury Corporation Zimbabwe, registered a company called Imvelo Incorporated in Zimbabwe. The new company is understood to be working on opening a bank account with final negotiations with the central bank.
Mr Ndlovu said the proposed venture would secure $200 million of which $100 million will go towards offsetting a debt that will see John Deere and AFGRI delivering state of the art farming equipment and implements to the farming community through a use now and pay later concession that has been negotiated with both entities, ARDA and the Ministry of Agriculture.
“We expect this to be done and out of the way by end of January or beginning of February. The other $100 million will fund infrastructure development,” he said.
Mr Ndlovu indicated that more investment deals were set to be lined up saying Zimbabwe was a virgin investment destination with vast opportunities in diverse projects such as new highways, railway lines and green energy developments. He urged Zimbabweans in the Diaspora to come together and partner with Government to revive the economy.
Meanwhile, the Zim-SA Forum has paid tribute to the Zimbabwe Defence Forces and ordinary Zimbabweans following a smooth political transition under Operation Restore Legacy. The organisation is confident President Mnangagwa would transform the economy, having already won the support of the local business leaders and the international community. The President has enthused the business community by his consistency in sending positive messages to the world, potential investors and international financial institutions. Zimbabwe is poised for economic boom under the new political dispensation, with average growth of 4.5 percent projected in 2018, according to the Ministry of Finance and Economic Development.