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Business rescue professionals (BRP) from embattled South African Airways (SAA) say the national carrier is in a “dire financial situation” and have set a September 17 deadline for more funds to continue the process. .
They have notified all interested parties that on that date they will announce the progress in obtaining the funds. If not enough progress has been made, they will convene a meeting of creditors on September 18 to discuss the way forward.
In an update on the corporate bailout process, the BRPs said financing was one of two essential problems they were wrapping up: the other was the termination of aircraft leases.
Without these two issues, the business rescue plan could not be implemented, they said.
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The government had already provided R9.3 billion in short-term funds to pay SAA’s creditors. More money was needed, but the government had promised to provide the rest of the necessary funds next week, they said.
Initially it was estimated that the business rescue process would cost around R10.3 billion.
“The problem that the BRPs have to deal with at the moment, refers to the existing funds that are available for operating expenses, which are close to being exhausted and, therefore, the availability of the necessary funds for the company during the The course of the next week will determine whether the corporate rescue procedures can continue, ”said BRP.
“Consequently, the BRPs have considered it prudent to inform the affected people about the dire financial situation of the company.”
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The issue of aircraft leases, which involves the termination of “excessively onerous contracts”, is almost over.
The BRPs said termination agreements had been reached for 33 of the 40 aircraft they had originally leased.
They expected to finalize the termination of the seven remaining “onerous” leases by the end of the month. Otherwise, they would have to initiate legal proceedings to cancel them.
Meanwhile, putting more stress on SAA’s already highly stressed finances, about 3,146 of its 4,600 employees have applied for voluntary severance packages. These include more than half of the management; more than 600 pilots; two-thirds of the cabin crew and nearly all ground crew, SABC reported.
According to the corporate rescue plan, 2,700 workers were assigned to the voluntary packages at a cost of R2 billion. This means that not all package requests will be approved.
The president of the National Transport Movement (NTM), Mashudu Raphetha, told SABC that the unions were very concerned about the situation, as they hoped that sufficient funds had been secured at this stage.
He added that the workers requested packages not because they wanted to quit their jobs, but because they and their families needed to survive.
“They are seeing that they have to choose between their survival and something that they know cannot arise. So it’s about their families; it’s about meeting their financial obligations and the number is staggering, ”said Raphetha.
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