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Comair not insolvent and can be rescued – BRPs

Aviation group ‘had no choice but to file for business rescue’.
The owner of and operator of British Airways domestic flights in South Africa has been grounded, together with other airlines, since March 26.

Comair is not factually insolvent, but financially distressed as a result of being grounded due to Covid-19 air travel bans, the aviation group’s business rescue practitioners (BRPs) said in a statement on Tuesday.

Shaun Collyer and Richard Ferguson, the BRPs appointed by Comair to handle its business rescue proceedings, have highlighted the fact that the group has R7.42 billion in assets on its balance sheet compared with liabilities of R5.48 billion.

Collyer said it was important to distinguish between factual and commercial insolvency, adding that the BRP’s believed there were “reasonable prospects for Comair to be rescued” through business rescue proceedings.


Court ruling on SAA retrenchments ‘wrong’, say BRPs

Comair to file for voluntary business rescue

Following its decision to go into business rescue on May 5, the owner of and operator of British Airways domestic flights in South Africa, also suspended trading of its shares on the JSE.

“Comair is not factually insolvent…. Rather it is financially distressed because there is insufficient cash to pay ongoing costs and obligations and, with its flights grounded for an uncertain period [and] no opportunity to generate revenue,” Collyer stressed.

Backing his belief that the company can be saved, he noted that in addition to the group’s assets exceeding liabilities, Comair is regarded as “a critical infrastructure asset” for South Africa.

“It is competitively well placed, having enjoyed a 39% market share for domestic travel… And, there is immense goodwill and a longstanding reputation in the travel community and with the public and customers,” he added.

Collyer said that the successful rescue of Comair’s business would depend on the support of all stakeholders, and this would include post-commencement finance.

He reiterated that as a result of the Covid-19 lockdown, Comair has been unable to operate any scheduled passenger flights since March 26, 2020, and consequently has not been able to earn revenue.

Read: Magazines, airlines and retailers aren’t ‘failing’ just because of Covid-19

“When the government subsequently announced that the lockdown would be lifted in phases, and domestic flights would only resume in level 2, Comair had no choice but to file for business rescue,” he said.

Meanwhile, Ferguson said that a business rescue plan is currently being prepared in consultation with affected parties. The affected parties include the group’s creditors, shareholders, registered trade unions and employees. If approved and adopted they would then implement the plan.

The next step in the business rescue process is the formation of a creditors’ committee and an employee representatives’ committee respectively.

Creditors wishing to submit claims can download claim forms from

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I imagine the post Covid prospects without SAA should also be a positive for Comair?

we all know what happens when a suspended share is allowed to trade once again. short term trade opportunity ahead!! (check out 4sight, Tongaat-hulett)

Investment wise is this company is trading at a bargain – a quick back of the page calculation shows the cash generation by this compnay valuates the shares by at least R5.00, the share was suspended after the day close of roughtly R1 a share. (discount rate at 8.4% and terminal rate of 5%)

The company however was slowly losing out on profit margins as it was squeezed by weak rand, slowing travel and oil prices, however,oil prices are more or less at historical lows and restructuring of the company may just be what it needs to tackle the weak rand and traveling.

Lets see..

SAA vs Comair BRP’s.. who’ll have a workable plan first?

At least they don’t have to put up with interference from a commie who thinks he is in charge rather than the BRPs.

Comair was well run, needs saving. SAA…..the opposite.

Cannot help but to ponder whether it’s not Govt’s ultimate aim to try and kill SAA’s local competition, by keeping lock-down for airlines as long as possible.

SAA can “afford” the economic lock-down, as it can (naturally) operate at a huge loss indefinitely, thanks to the SA taxpayer.

When economy fully opens again, their aims are to have no local competition left .

SAA has been doing this for the past 2 decades to some smaller local operators I can recall….just kill free-market competition by going into occassional airfare price war…which only the govt can weather.

Remember still the red planes of “1Time”? Does the names Nationwide, or Velvet Sky ring a bell…?

This criminal government taxes this profitable and efficient business and steals the money that was rewarded to Comair by the courts that SAA had to pay, while it protects the loss-making and corrupt National Airline SAA. The government is throwing good money after bad.

SAA is a proxy for the socialist ANC, bankrupt, inefficient, criminal, destructive and in a death-spiral. This criminal socialist government taxes and plunders their competition to support their failures. A nation that rewards such a government with their vote does not deserve to have food on their tables. The Malthusian Trap is patiently waiting to deliver justice, as it has been doing for ages.

In the modern age, famine is always the result of a political decision and not the result of weather patterns.

I always understood insolvency to be a term applied when a company can no longer meet its financial obligations. So if “…there is insufficient cash to pay ongoing costs and obligations” how is this different? And I would question how you determine the asset value of R7.42 billion – I cant imagine there’s much of a market for second hand 737s right now.

Anyway I hope they come right as I’m holding two of their IOUs for cancelled flights!!

The wheels are falling off everywhere.Denel next

I know. It’s rather sad.
In DENEL’s case one wouldn’t refer to “wheels”….perhaps it could be a case of…uhm…dry powder and an open flame.

When they say its not insolvent, then you know it is.

Obviously, unlike SAA, Comair CAN be rescued! Comair does not have a rotten reputation,no tax payers will boikot its service in future, it entered business rescue BEFORE it was bankrupt so there was still a business to save, Comair doesn’t have to accommodate a Mr Gordhan political legacy pipedream and neither does it have to be a national airline for “the people” most of whom struggle to scrape daily taxi fare together to get to and from work!
Its financial statements are all audited on time and at no stage was it a sitting duck for public boikot as soon as it rises in some obscure form under a new disguise from “the ashes” of its ghost in a previous life.
So Comair, congratulations and take to the skies ASAP, but stay F A R A W A Y from the “new” SAA to protect your brand!

Insolvency is when liabilities exceed assets and business is unable to service debt (or worst case scenario such as with several SOEs, interest on debt)

You’ll get your IOU honoured from Comair unless SA government (SAA) once again embarks as before, on unfair competition against a rival – this time by using virus as excuse to keep competition grounded.

End of comments.





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