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Comair operates its own low-cost airline Kulula.com, as well as British Airways nationwide under a license agreement.
- Comair expects to start flying again in December if a proposed business rescue plan, released just before midnight Wednesday night, is accepted.
- The Comair Rescue Consortium (formerly known as the Moritz Consortium) is the preferred offering and is made up of, among others, former Comair directors.
- The goal is to remove Comair from the JSE and create a new board in due course.
Comair expects to start flying again in December if a proposed business rescue plan, released just before midnight Wednesday night, is accepted.
Comair operates its own low-cost airline Kulula.com, as well as British Airways in South Africa under a license agreement.
The JSE-listed group entered a corporate bailout in May this year after all its flights had to be suspended at the end of March due to the national coronavirus lockdown. The flights have not yet restarted.
Comair rescue practitioners have now accepted a proposal from the Comair Rescue Consortium (formerly known as the Moritz Consortium) as their preferred offer to move the group forward.
The consortium includes former Comair board members Martin Moritz, Rodney Sacks and Piet van Hoven, as well as other high net worth individuals such as Hilton Schlosberg and Steven Herring, as well as Luthier Capital. Moritz, Van Hoven and Sacks each have more than 40 years of experience, serving in various executive and board roles at Comair.
The restructuring plan focuses on streamlining operating costs and increasing ancillary revenue, including reducing the workforce from approximately 2,200 employees to 1,800.
“The consortium brings with it a seasoned management team, former Comair executives, all with extensive experience within Comair, including Glenn Orsmond, Kirsten King, Brian Kitchin, Reshika Singh, Iain Meaker and Gabriel Moritz,” the consortium said in a statement. .
“We are excited about the opportunity to rescue Comair, change the business and restore Comair to its position as the preeminent airline in South Africa,” Glenn Orsmond, a member of the consortium and his management team, told Fin24 on Thursday. Morning.
Creditors and shareholders now have until September 18 to consider and adopt the plan, according to a statement.
The goal is to remove Comair from the JSE and create a new board.
The publication of the plan follows negotiations with the consortium, which will see a new capital injection of R500 million in exchange for a 99% stake. Up to 15% of this equity stake will be assigned to a suitable B-BBEE partner within 12 months.
Additional funds from lenders of R1.4 billion are required to successfully implement the adopted plan. This will comprise R600 million in new net debt.
The fleet will be comprised of 25 aircraft, of which 17 will be next-generation Boeing 737-800s and the remaining three Boeing 737-400s. This combination of fleets increases the proportion of owned aircraft, which limits exposure to exchange rate risk.
Other elements of the offering include maintaining existing relationships with British Airways, Discovery Vitality and Boeing.
Richard Ferguson, one of the business rescue professionals, said in the statement that if creditors approve the plan, the business rescue process should conclude on March 31, 2021, if not earlier, after which Comair will continue to operate as a sustainable business.
In the event that the precedent conditions of the plan are not met, the plan details how the business will be liquidated in a structured manner, as this will achieve a better return for creditors than a liquidation.
