Air Tanzania risks to lose head office over debt claims

(eTN) – Information has come to light that the head office building of Air Tanzania (ATCL) is currently being assessed as to its value following an order by the Tanzania High Court over an outstanding debt of over 1 billion Tanzania shillings, which the airline has failed to pay over a car hire deal which saw Tourism Services, Leisure Tours and Holidays Ltd. supply vehicles to the company.

The company won their principal case already in 2009 but ATCL had failed to pay the debt which has since accrued compound interest.

Upon application by the creditors they now expect the airline’s head office be auctioned off to repay them, even though one official close to the airline said in a mail to this correspondent: “The debt is there, but the cash flow of the airline over the past years was not good. First they were grounded over documentation issues from TCAA [Tanzania Civil Aviation Authority], and then they lost the B737 in Mwanza and the Q300 was also badly damaged in Kigoma. They hope that government can step in and inject capital to prevent the office block from auctioning. That would be a big setback and detrimental to the airline. They may not be able to pay the rent even considering their limited income.”

The deadline for the submission of the value is this week.