SAA rescue plan comes into operation

Rescue practitioners say the company’s restructuring plan is now unconditional.
SAA has been under rescue since December 2019. Image: Shuttershock

South African Airways’ (SAA’s) business rescue plan has come into operation, after an outstanding condition related to the guarantees of lenders was fulfilled on Monday. 

In an update on Tuesday, SAA business rescue practitioners Siviwe Dongwana and Les Matuson informed affected persons that the outstanding letter from government – confirming that lenders who are owed guaranteed debt of R16.4 billion would receive their payments – had been finalised. 

This means that all the conditions that had to be concluded prior to the airline’s restructuring process have now been completed. 

Delays 

Initially, the rescue plan had set a deadline of July 22 for all the conditions precedent to be completed, however discussions between government and the lenders on the terms of the guarantee letter were still ongoing when the deadline arrived. 

Treasury had already set aside R16.4 billion for guaranteed debt and interest to repay loans extended to SAA by a group of banks and the Development Bank of Southern Africa before and after business rescue commenced.

Read: SAA creditors vote in favour of deadline extension for outstanding condition

In a creditor’s meeting on Thursday – where 95% of the creditors voted in favour of extending the deadline while negotiations were ongoing – the BRPs stressed that neither government nor lenders could be faulted for the delay, as the process was not familiar to either party. 

When SAA went under business rescue in December it became the first state-owned entity to do so. The BRPs said the legal framework that they were trying to put together was a “novel” one and “required a little bit of an adjustment in the way of thinking and doing things.”

Substantial 

The BRPs said they are “currently attending to and finalising the remaining outstanding administrative issues before filing a notice of substantial implementation” in terms of section 152 (8) of the Companies Act”. 

Once this notice is filed, SAA will no longer be in business rescue and the rescue plan will remain in effect, where the company and creditors will be bound by its provisions.

SAA directors will also regain control of the operations of the business. 

Read: Will restructured SAA take flight?

SAA’s chief commercial officer Philip Saunders was appointed as the interim chief executive for SAA; he’ll be responsible for heading up its R10.3 billion restructure. 

The rescue process will involve issuing R2.2 billion severance packages to just over 2 700 employees, running the domestic operations of SAA until January 2021 and thereafter gradually expanding the service and workforce for international and regional services under level one of lockdown. 

Government has committed to mobilising the money needed for the rescue from a variety of sources, including strategic partners and institutional investors such as pensions funds. 

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What if the 10 million ANC floaters are voted out by the 11 million smokers in the next election?

A lot of these crooks will have to run long and hard. The jails will be filled to the rafters.

To assist the smokers there are also all the people that has been left destitute in the liquor industry. Many millions more that lost jobs because of these idiots.

They must be made to pay.

18 million did not vote the last time. they will surely vote this time.

Are all those smokers over the age of 17? You can smoke at sixteen but only vote at 18 right now.

Dear Mmmmm: The problem is that any voters leaving the ANC are dumb to begin with (having supported them) , therefore probabably dumb enough to move to the EFF : If we think they ANC are bad can you imagine if that clueless bunch get in !!!!

It’ll never fly…

I think it will. Joburg to Capetown. They will need another 16.4 billion for the return trip.

Pravin Gupta Air.

Tell me there’s no link between getting the IMF funding and government agreeing to fund SAA

Precisely my thought; there’s still no disclosure about the R10,3bn to be “mobilised”…

off course these beggars are going to use the IMF moneys to rescue the SAA!

Just in time for all staff of Lootuli House to plan their free Xmas holiday flights…

This SAA debacle have seized to be funny long long ago.

This is very “comforting” to know that this Govt has so much money to waste! Govt’s finances must be way better off than expected, if they can afford such ‘projects’.

So in years to come….same old, same old….”Banana Air” will need billions to continuously bail out.

This indicates to me that Govt is cash flush in reality, and can afford to reduce income tax rates across the board.

OR???

They are just plain DUMB

I’m so sick and tired of this stealing

I completely understand, but unfortunately it will never stop.

Is that a lift off?

Im waiting in eagerness to see how this bird will fly without wind (…and maybe without a engine)

Somebody is going to give them wiinnggs

An ANC government sponsored Ponzi Scheme developing right before our eyes!!

Lemme guess, IMF Covid bailout money being redirected to save the dead duck SAA, absolute joke.

Oh, so they found the money?
How TITO convenient and stupid do you think we are.
Pravin and you played a very stupid game in my opinion. Basically the IMF has bailed SAA.

Money will come from prescribed investments or the IMF loan.

Either way treasury will say it’s not the public purse (which of course it is).

It’s never going to come from investors. Nobody that stupid

The government continue to do a lousy and reckless job. The judicial system has failed the country because it is so slow and without teeth. It may be time to campaign for early elections.

End of comments.

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