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South Africa’s Comair Ltd will require up to R1.2 billion in financing and will have to cut a fifth of its workforce to restart operations, the managers in charge of the private airline’s restructuring said.
The airline, which has been under a form of bankruptcy protection since May, will be able to begin operating in December if a commercial rescue plan presented Wednesday night is approved, they said.
The plan, which had been delayed for more than two months, will see a group of investors inject up to R500 million of capital, giving them 99% ownership of the company.
Creditors will also have to provide new debt funds of up to R600 million, along with another R100 million debt from the Discovery insurer.
“This (plan) will further result in the resumption of employment for the remaining employees of the company, the provision of air services to its customers and the establishment of resumed income with which to meet their obligations,” said administrators Shaun Collyer and Richard Ferguson.
The company’s total workforce will be reduced to 1,800 from about 2,200 and its fleet will be reduced to 25 aircraft from 27, they added in their plan.
Read Comair’s business rescue plan here.
Comair was forced to halt operations as of March 26 when South Africa imposed a travel ban to counter the COVID-19 pandemic, cutting off the company’s cash flow and its ability to pay mounting debt.
Creditors will meet on September 18 to vote on whether to approve the rescue plan.
If approved, the plan will be implemented by the end of November so that the airline can begin operating on December 1.
Before ceasing operations, Comair operated the local franchise of British Airways and the low-cost airline Kulula.com. It was a beacon of private aviation in South Africa for almost seven decades.
The plan will also require the company to be delisted from the Johannesburg Stock Exchange, where its shares have been trading for more than two decades.
