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The airline’s creditors have to choose someone to handle the “receivership” of the remaining matters.
Gallo Images / Jacques Stander
South African Airways (SAA) corporate rescue professionals plan to exit the process at the end of March.
SAA has been in business rescue since December 5, 2019.
The main achievement of the business rescue process, according to professionals, was SAA’s transition from being an insolvent company to a company that is both solvent and liquid, rescue professionals say in a letter to creditors dated March 18.
Compromises that professionals negotiated with concurring creditors and lessors have reduced the state 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 approximately 1,000. This was achieved through voluntary severance packages and a subsequent downsizing process.
A number of outstanding issues remain before the professionals, who must act in accordance with the business rescue provisions in the Companies Act, can present a notice of “substantial implementation” of the rescue process and return the airline to the provisional board. .
They must, among other things, guarantee the payment of unpaid salaries or the provision for it and the payment of creditors after the opening. The Department of Public Companies (DPE), SAA shareholder, has offered employees a three-month salary agreement for outstanding salaries since May 2020. Most of the employees have accepted this offer.
The airline’s creditors have to choose someone to take care of the “receivership” of the remaining matters that still need to be implemented in terms of the corporate rescue plan, which was accepted by creditors in July last year. The “receiver” would work with the interim board as current rescue practitioners will exit the process.
This would include, among other things, the payment over a three-year period of a total of R3.5 billion. This is already stipulated in the accepted business rescue plan and is part of the total R10.3 billion required by the plan. The R3.5 billion is R1.7 billion for aircraft lessors, R600 million for creditors, and R1.2 billion as part of the non-flown tickets.
According to rescue professionals, they are doing their best to finalize the pending items by the end of March 2021, so that they can file a notice of substantial implementation with the Business and Intellectual Property Commission.
