Dar Es Salaam — The Hong Kong-based China Sonangol International Holdings Ltd is to buy shares in the financially strapped national carrier, Air Tanzania Company Limited (ATCL) and provide additional funds to purchase new aircraft.

A process of restructuring has begun in which a total of 188 employees of have agreed to sign the retrenchment agreement to enable this course of action.These are among 330 ATCL employees lined up for retrenchment before the national carrier is taken over by the new investor from China.

The ATCL board chairman Mustafa Nyang'anyi has said that the signing of the retrenchment pact was held last week and it was one of the issues that delayed the divestiture of the airline. "They have signed the agreement and all things have been forwarded to government, and they are now waiting for retrenchment letters and cheques for their benefits," he said.

This is the second time Government seeks investors for the ill-fated airline.

In 2002, government sold its 49 per cent stake to South African Airways.

This partnership was later terminated. SAA had paid the government of Tanzania US$20 million to purchase 49 percent shares of ATCL.

Air Tanzania recorded a pre-tax loss of almost US dollar 7.3 million in its first year following privatisation and part ownership by South African Airways. The loss was mainly attributed to the inability to expand the network as quickly and extensively as was originally planned.

Since its birth in 1977, Air Tanzania Corporation (ATC) now ATCL has been been a shame to the nation and was baptized "All Times Cancellation" after failing to serve its customers effectively.

In December 2008, the Tanzanian Civil Aviation Authority (TCAA) withdrew the airworthiness certificates for all Air Tanzania aircraft and grounded the airline for unspecified safety and maintenance violations.

In the same month, the International Air Transport Association canceled Air Tanzania's membership in the organization, citing the same safety and maintenance violations before it was later reinstated.