State-owned regional airline SA Express’s provisional liquidation has been extended to April 29, 2021. The announcement comes eight months after the airline was placed under provisional liquidation when its business rescue process failed.
In a bid to save the airline from being placed under final liquidation, a worker-owned entity called Fly Sax was chosen as the preferred bidder for the purchase of the airline in October last year.
In a circular to the airline’s creditors on Monday, provisional liquidator Aviwe Ndyamara said the sale agreement with the bidders has not yet been concluded, adding that a number of the airline’s licences have expired due to the ceasing of operations.
SA Express’s Air Operator Certificate (AOC) expired on July 31, 2020, while its Aircraft Maintenance Organisation (AMO) approval expired on June 30, 2020.
In a statement on Thursday, Fly Sax director Thabsile Sikakane said once all agreements are concluded the company will work on the renewal process of its AOC. It will also begin the process to recover some of its routes and airport slots which were awarded to other airlines in December in the domestic and international markets.
Over the next 12 months, the airline will hire some of its former employees on a contract basis to assist in terms of planning for the new airline, Sikakane said.
While former SA Express employees will be prioritised, anchor investors Imperial Capital and the Landile Shembe Foundation are expected to also bring their management into key positions.
The National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) have come out in support of the postponement of the airline’s final liquidation as: “It would be far worse for workers if the airline was liquidated than if it was sold,” according to spokesperson Phakamile Hlubi-Majola in a statement.
The Department of Public Enterprises (DPE), which is currently the sole shareholder of the airline, is yet to accept or decline the shareholding agreement with Fly Sax.
The purchase price for the airline is R50 million, which is payable in the form of a bank guarantee by the airline’s buyers. The funds were expected to be raised through the sale of company assets in November last year.
Proceeds from the sale were expected to go towards the reduction of the purchase price, with any shortfall to be recovered from the bank guarantee provided to the liquidators by Fly Sax. However, the liquidator was only able to raise roughly R24 million of the amount required in a massive auction of the airline’s assets.
The airline requires R250 million in start-up capital, according to the bid proposal – and 20% to 30% of this will be required from the anchor investors before its profile can be opened up on the Uprise.Africa platform for crowdfunding investors.