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Unions are calling on Ramaphosa to get involved in the process of ensuring SAA gets a R10.5 billion ransom, according to a report from the City press.
The South African National Metalworkers Union (NUMSA) and the SA Cabin Crew Association (SACCA) issued a joint statement on Saturday urging Ramaphosa to “call Public Enterprise Minister Pravin Gordhan to order and to the Minister of Finance, Tito Mboweni, of the Treasury “.
They believe it is unfair for workers to be taken “from one pillar to another” and for no one to take responsibility for the latest failure to keep SAA up and running.
“When we met with Ramaphosa and the top six of the ANC at Luthuli House, they assured us that they support a restructured SAA that is free of the baggage of the past and is viable,” the statement said.
“The president promised us directly that he supported SAA’s change of course, so we ask him to keep his promise.”
The government reportedly moved forward on Friday on a plan to fund SAA’s bailout and business restructuring, says City Press, and Mboweni is expected to make an announcement on this matter next month.
Government to rescue SAA
On Thursday, September 10, SAA Business Rescue Professionals (BRP) said the airline needed short-term funding from the government the following week to continue operations.
“The BRPs have been in commitments with the government regarding obtaining this financing and to date the government has advanced approximately R9.3 billion for the payment of the various lenders of the company as established in the plan”, said the professionals.
However, the remaining short-term funds that were needed were not yet available, and both the SAA and the BRPs were collaborating with the government on this issue.
“The BRPs will inform affected individuals on September 17, 2020 on the progress of the advancement of funding,” the professionals said.
“In the event that the BRPs are not satisfied that sufficient progress has been made for the timely advance of the financing, a meeting of creditors will be convened on September 18, 2020 at 11:00 am to interact with the affected people on this matter and the proposed way forward taking into account all relevant factors. “
On September 18, the Department of Public Companies (DPE) confirmed that the government would change funding priorities to finalize SAA’s restructuring.
“The national airline will not be liquidated. Because the restructuring process should approach its completion in the coming weeks, lending institutions will be asked to finance the restructuring process and fulfill the commitments of the voluntary severance packages and the reduction of expenses, “said the DPE.
“The DPE is sympathetic to the plight of SAA employees as it continues to work with other government departments, including the National Treasury, to ensure that the airline’s restructuring plan is successfully implemented.
In response to this, the unions said that they had taken note of these guarantees, but were concerned that these words would not translate into action.
“This is not the first time that the public companies department and the Treasury have failed to meet the deadline for funds to be available for the corporate rescue plan,” the unions said.
“We hope that this time, the money will really materialize.”
The unions also noted that the next seven days are critical because if the government does not provide the money at the next meeting of creditors, the liquidation of SAA will again be at stake.
SAA’s long history of failures
This is not the first time that SAA needs to be rescued and restructured.
SAA has undergone several leadership changes and restructuring strategies; however, the national airline continues to demand that taxpayer bailouts continue to work.
Previous restructuring plans include the 2004 Bambanani, which sought to reduce operating costs by R 1.6 billion over three years, the 2007 plan that included restructuring specialists The Seabury Group, and the Long-Term Restructuring Strategy (LTTS) of 2013.
To learn more about the failures of SAA’s many recovery strategies over the past 15 years, Click here.
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