Talks between Air Zimbabwe and China’s largest private airline on a possible strategic investment have broken down amid disagreement over handling of the US$140 million debt on the African carrier's books and the equity stake to be taken up.
The Zimbabwean official news agency ZIANA reported the breakdown in talks between Air Zimbabwe and Hainan Airlines quoting Transport Ministry Permanent Secretary Patson Mbiriri as the source for the information.
Mbiriri declined to give ZIANA further details, but insiders said Hainan refused to assume Air Zimbabwe’s debt and insisted on a 65 percent stake not 45 percent as proposed.
Insiders added that the Chinese airline negotiators also demanded that the government in Harare be excluded from management structure of a restructured airline.
Air Zimbabwe has suspended regional and international flights fearing its planes will be impounded by creditors while on the ground in London and Johannesburg.
The High Court recently appointed a judicial manager to run the airline – though the ZANU-PF leaning Air Zimbabwe board says it is not aware of this development.
Economic commentator Rejoice Ngwenya said the Chinese abandoned the talks because they feared they would be investing in a politically unstable state firm.
President Robert Mugabe and Hainan Chairman Chen Wenli met in Beijing in November as Zimbabwe submitted detailed proposals for a possible partnership.
There were indications at that time that Harare would waive a requirement under the Indigenization and Economic Empowerment Act for black Zimbabwean investors to hold a 51 percent stake in any foreign enterprise in the country.