Privatisation Commission snubs Comair on Air Malawi


The Privatisation Commission (PC) has snubbed calls by Comair Limited, a British Airways franchisee, to participate in the restructured Air Malawi’s bid for a strategic equity partnership without submitting a formal bid.

The non submission of a formal bid by the South African-based Comair Limited at the close of bidding process on December 17 is not in compliance with bidding instructions which specifically invited bidders to recapitalise a restructured Air Malawi Limited, according to PC.

“The PC is obliged to disclose that a representative of Comair Limited of South Africa had approached the commission, a few days before the closing date, to intimate that Comair would not be submitting a proposal.

“Instead, Comair referred the commission to the 2009 negotiated draft shareholders agreement with the Government of Malawi,” said the PC on Friday.

But the PC, a body mandated by government to seek a partner for Air Malawi, advised Comair Limited that previous contacts with the Malawi Government are outside the current bidding framework.

This, therefore, means that five companies, Ethiopian Airways of Ethiopia, Globe Business Network of Botswana, Fly Africa (South Africa), Air Express Limited (Malawi) and Alpha and Omega/Abrina of South Africa, have remained as final bidders.

In 2009, Comair Limited wanted to establish a new airline to replace Air Malawi to operate under a British Airways franchise as is the practice of Comair Limited. The deal, however, went sour and was subsequently cancelled.

Nonetheless, the PC has said despite Comair being out of contention, their wish to establish a new airline under a British Airways franchise will provide an opportunity to the Government of Malawi for a fallback position in the event of the current bidding process not yielding an eligible preferred bidder.

The strategic equity partner (SEP) is being invited to recapitalise the new investment vehicle, Air Malawi (2012) Limited, based on a new and viable business operational model.

The level of participation within the SEP should bring the participation of Malawian nationals, both with the SEP and government shareholding to 51 percent, according to the PC.

Liquidator, Lekani Katandula, a partner at auditor and business advisory firm Deloitte is currently overseeing the ‘orderly’ transfer of assets from Air Malawi Limited to Air Malawi (2012) Limited.

The PC earlier said that the selection criteria of the preferred bidder will place strong emphasis on financial and technical capabilities to recapitalise Air Malawi (2012) Limited.

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