Board of directors recommends liquidation
Malawi Airlines could be wound up.
This is in any case what emerges from the resolutions of the board of directors of the Malawian parastatal company (51% for the State and 49% for Ethiopian Airlines), held on March 25, to which Weekend Nation had access. “The directors have valued the company and found it technically insolvent and non-exploitable, if shareholders do not inject equity into it.
The directors believe that they cannot continue to do business as it is, without a bailout, while there is still a significant gap between costs and revenues,”read the resolutions. “In the absence of a new injection of capital, and without the approval of all the requested cost relief measures, the continuity of operations is uncertain. The board of directors recommends an orderly liquidation of the company, and further recommends the appointment of a liquidator to fulfill its obligations and minimize additional responsibilities,”adds the document. According to Weekend Nation, the state is now reluctant to consolidate the cash flow of the airline to the tune of $ 9 million while it continues to be in deficit since its inception.
According to the board of directors, the carrier lost $ 17.86 million at the February 2021 count against a total debt estimated at $ 17.54 million. The Covid-19 pandemic has worsened the financial situation of the company, which had to suspend its international operations (Johannesburg and Dar es Salaam) between April and September 2020. Note that the request for liquidation of Malawi Airlines comes while its operations are currently suspended since March 26. This suspension is due to the dispatch to Addis Ababa for maintenance of its Boeing 737-700. The same is true of its second aircraft - a Dash8-400. The fate of the company now hangs on the decision of the President of the Republic, Lazarus Chakwera, who is called upon to decide in the coming days.
