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Aviation company Comair has announced that a majority of its creditors and shareholders have voted to adopt the business rescue plan.
In terms of the business rescue plan, the preferred investment consortium, comprised of several former Comair board members and executives, will invest new shares of R500 million in exchange for a 99% stake once the requirements have been met. suspensive conditions established in the business rescue plan. met.
Up to 15% of this will be allocated to a suitable BBBEEE partner within 12 months, he said. Over the next two months, R100 million will be paid in two equal installments as secured post-start financing.
Additional financing is required from lenders of R1.4 billion and will comprise R600 million in new debt. The remaining R800 million will be deferred debt, with principal payments deferred for one year and interest for six months.
Comair will be delisted from the JSE and a new board will be established, the group said.
The airline said the restructuring plan will focus on reducing operating costs and increasing ancillary revenue.
This will see the current workforce shrink from approximately 2,200 employees to 1,800 through voluntary retirement and early retirement programs, as well as the Section 189 downsizing process that began before the corporate bailout continued.
The fleet is intended to be restored to 25 aircraft, including two Boeing Max aircraft. The aircraft will gradually return to service starting in December with an acceleration period of seven months until June 2021.
Existing relationships will continue with British Airways, Discovery Vitality, Slow Lounges and Boeing, he said.
Comair CEO Wrenelle Stander said adoption of the business rescue plan will save 1,800 jobs.
“Entering the business rescue was a difficult decision, especially since good progress was being made to fix the financial situation, however, the extraordinary circumstances of the closure made the company unable to earn income,” he said.
“When the shutdown occurred, the corporate rescue became the only responsible course of action. If we had not made that difficult decision, Comair would not have flown again. There may still be some obstacles in the way, however now that the plan has been adopted, clearer skies are finally on the horizon. “
Richard Ferguson, one of the business rescue professionals, noted that a number of prerequisites in the plan still need to be met. If this does not happen, the company will be liquidated in a structured way to achieve the best return for creditors.
“That does not diminish how important this moment is to Comair, its employees, investors and the South African flight public. After almost six months of intense work and negotiation in a tense economic environment, it is an exceptionally positive result, ”he said.
Comair plans to restart air services in December with the British Airways and Kulula brands.
If all goes according to plan, the business rescue process should be concluded by March 31, 2021, after which Comair will continue to operate as a sustainable company.
Read: Comair, Kulula’s father, hopes to fly again in December
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