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Golden Sibanda Senior Business Reporter
MEDICAL Air Rescue Services Limited could attain viability in the next 12 months with only US$100 000 required to optimise opportunities in the air wing, judicial manager Mr Christopher Maswi has said.
Progress has been made in restoring Mars’ viability with the loss level reduced by more than 50 percent from where they were through use of a mix of new revenue generation initiatives and cost reduction.
The Mr Maswi said the first phase to restoring viability was right-sizing it to a break-even point on the current business and then injecting
US$100 000 capital to optimise the opportunities on the air wing.
While Mars continues to do business with most medical aid societies despite its current challenges, the companies’ insistence on cash transactions as and when service is rendered has compounded its situation. This is because capitation – a monthly contribution made by medical aid firms to the company for maintenance of critical infrastructure – used to contribute about 40 percent of the company’s revenue. Companies now prefer paying a fee when their patient is picked up.
The sudden reduction in capitation, especially the arrangement with Cimas – the largest contributor at US$226 000 month saw Mars losses peak at US$140 000 monthly.
In July Mr Maswi said Mars, a subsidiary of businessman Mr Zac Wazara’s Spiritage group of companies, was saddled with liabilities of US$1,948 million compared to the firm’s US$1,2 million assets.
“We have made progress in restoring Mars’ viability and the loss level has reduced by more than 50 percent from the levels inherited using a combination of new revenue generation initiatives and cost rationalisation. Given the economic environment we have made reasonable progress,” Maswi said.
As a result Mars has huge infrastructure that now needs to be funded from revenues generated from its activities on a monthly basis. It still has some level of capitation but at a much lower level than 2 years ago.
The High Court in February this year appointed Mr Maswi of Fair Value Management Mars provisional judicial management due to operational constraints amid a yawning asset and liability mismatch.
Mr Maswi said the medical air and road rescue service company, under his management, has embarked on a number of initiatives to cover
the gap created by the loss of capitation with good progress made to that end.
He said the sustainable long term viability of Mars was a function of the results of the current efforts and the general performance of the Zimbabwe economy. The Airwing presents the biggest opportunity. Mars picks clients from as far afield as Malawi, Mozambique, Zambia and South Africa.
Mars shareholders are expected to contribute over US$100 000 for acquisition of a new aircraft.
Online Reporter