Creditors of the airline have to elect someone to handle the “receivership” of the remaining matters.
Gallo Images/Jacques Stander
The business rescue practitioners of South African Airways (SAA) plan to exit the process at the end of March.
SAA has been in business rescue since 5 December 2019.
The primary achievement of the business rescue process, according to the practitioners, was to transition SAA from being an insolvent company to a company that is both solvent and liquid, the rescue practitioners state in a letter to creditors dated 18 March.
Compromises the practitioners negotiated with concurrent creditors and lessors have reduced the state-owned airline’s liabilities by R35.7 billion from R38 billion to R2.3 billion, according to the letter.
SAA’s workforce has been reduced from 4 700 to about 1 000. This was done by means of voluntary severance packages and a subsequent retrenchment process.
A number of outstanding issues remain before the practitioners – who have to act in accordance with the business rescue stipulations in the Companies Act – can file a notice of “substantial implementation” of the rescue process and hand the airline back to the interim board.
They must, among other things, ensure payment of unpaid salaries or provision for that is made and pay of the post-commencement creditors. The Department of Public Enterprises (DPE), SAA’s shareholder, has offered employees an agreement of three months’ salaries for outstanding salaries since May 2020. Most employees have accepted this offer.
Creditors of the airline have to elect someone to handle the “receivership” of the remaining matters that would still have to be implemented in terms of the business rescue plan, which was accepted by creditors in July last year. The “receiver” would work with the interim board as the current rescue practitioners will exit the process.
This would, among other things, include payment over a period of three years of a total of R3.5 billion. This is already stipulated in the accepted business rescue plan and forms part of the total R10.3 billion the plan requires. The R3.5 billion is R1.7 billion for lessors of planes, R600 million for creditors and R1.2 billion as part of unflown tickets.
According to the rescue practitioners, they are making every effort to finalise the outstanding items by the end of March 2021 so that they can file a notice of substantial implementation with the Companies and Intellectual Property Commission.