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Air Zimbabwe creditors to be paid through 1 to 1 Zimbabwe/US dollar ratio

Hundreds of Air Zimbabwe (AirZim) creditors, including over 300 ex-workers, will be paid various debts accrued by the airline before it plunged into administration in Zimbabwe dollars at a rate of US$1:ZW$1, businessdigest established this week.

This means creditors who were owed US$20k for instance, would receive ZW$20k, according to a payment plan confirmed by external administrators this week.

This week’s developments marked a new phase of a long struggle by workers, some of who had served the airline for decades, to receive their due.

AirZim, which entered external administration in 2018 as the government battled to protect it from creditors who were owed US$341M, sent out debt settlement proposals last week with administrator, Grant Thornton, undertaking to release payments once creditors signed off their papers.

Businessdigest understands that in making the payments, administrators will be guided by Statutory Instrument (SI) 33 of 2019, which converted all bank balances to Zimbabwe dollars at par with the greenback.

The SI also converted all United States dollar denominated assets and liabilities to Zimbabwe dollars except for unsettled offshore commitments. Of the total amount, US$314M was owed to domestic creditors.

This week’s developments meant that the government, which holds full control of the troubled airline, will pay out ZW$314M to domestic creditors instead of US$314M, which creditors were owed before currency reforms in 2019.

At the prevailing official exchange, the government will release US$3,7M to pay off the combined debt, instead of US$341M.

In an interview with businessdigest, a former AirZim executive confirmed receiving the debt settlement plan but said she would receive ZW$40K out of the US$40K that the airline owed her.

This translates to US$476 at the prevailing exchange rate, but much less at the black market rate where rates had been running amok in the past two months.

Source: Further Africa

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