86% of creditors vote in favour of SAA rescue plan

DPE says a new board will be announced in ‘coming days’.
Government has welcomed the news, saying rescue will provide a much better outcome for creditors and employees than liquidation. Image: Supplied

More than six months since troubled South African Airways (SAA) went into voluntary business rescue, the plan to restructure the airline has been given the green light by 86% of its creditors.

According to the Companies Act, a vote in favour of a rescue plan requires 75% of the voting interests in order to pass.

The ball is now in government’s court regarding whether the business rescue can come into operation and be fully implementable now that the approval of the plan has been settled and the majority of employee unions and non-organised staff have endorsed it.

Funding 

The airline’s restructure has been costed at R10.4 billion, in addition to the R16.4 billion that government has set aside to pay guaranteed debt over the next three years.

National Treasury recently said that there is no additional money to fund SAA, leaving the question of where funding will come from unanswered.

Business rescue practitioner (BRP) Siviwe Dongwana said the government has informed them that it is in “full support of the plan and is committed to raising the requisite funding”.

“In this regard, a letter will be delivered to the BRPs tomorrow,” said Dongwana. July 15 is the deadline outlined in the business rescue plan.

Government has welcomed the vote, saying it would provide a “much better outcome for creditors and SAA employees than liquidation”.

“In supporting the plan, the government is committed to mobilising the necessary resources to fund the transition. This includes the Voluntary Severance Packages (VSPs) agreed with the unions, and meet[ing] the minimum requirements of the Labour Relations Act and Basic Conditions of Employment Act,” said the Department of Public Enterprises (DPE) in a statement.

Acting CEO named

Earlier in the day, DPE acting director-general Kgathatso Tlhakudi announced that SAA chief commercial officer Philip Saunders has been appointed acting chief executive of the new airline that is expected to come out of the rescue process.

Eighty-eight percent of creditors voted in favour of the amendments, the largest being the retention of an additional 1 000 employees on a 12-month training layoff scheme.

Read: Government, unions agree to retain 1 000 more employees in new SAA

Tlhakudi added that a new board will be announced in the coming days. 

“The department in the coming days will be announcing the interim board of the new SAA. The interim CEO for the airline will be Phillip Saunders, who has a credible track record of leading airlines around the world, and his last position before joining SAA was at [the International Air Transport Association],” he said.

Strategic equity partners

On the issue of potential funding, Tlhakudi said the SAA coming out of this restructuring process has proven to be attractive to potential investors and strategic equity partners. 

“This has been reflected in the approaches that government has received from local and international investors and players,” he said.

Read: DPE and pilots pull in different directions ahead of critical vote on SAA rescue plan

Tlhakudi also said on Tuesday that government is in the process of concluding the appointment of a transaction advisor to tie up the initial engagements that government has had with prospective strategic equity partners (SEPs) and in “not too long a time we should announce the preferred SEPs for SAA group and its various business units”.

“The new SAA will be a worthy partner to those that choose to support the process that is represented by the business rescue plan that [was] put before the creditors committee this afternoon,” he added.

“We are saying to competitors, business partners, suppliers, and customers represented in this room that your patience in the process that has taken seven months so far shall be rewarded by better business going forward.”

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This sounds like a sequel to a horror movie for the South African taxpayer.

This will fly like a lead balloon.

I’m confused..is Pravin Gordhan a good guy or a bad guy? In this soap opera I’ve lost the plot.

He is DOM.

…Pravin Gordon is a marxist, so it will not his pocket hurting when 26billion is handed out
….after all he, his family and extended family will get mahala flights to Mauritius, London, Singapore etc along with Nokasana, Cyril (our pathetic president) and ever other minister and extension

Pravin Gordon get most perks we can only dream of

Think of it this way:
Since it costs R500,000 investment to create a single job, R1Bln = 2000 jobs and in this case 20,000 jobs

The 1 time the and was right:
When the South African Youth and development Fund was tasked by the anc to calculate how much a job would cost to create, they came back with a figure of R5mil per job.

Here we have a situation where by we are spending R10bln to save 1000 jobs = R10 million per job.

Sorry the anc was wrong again.

Why are people upset? this is TAX country i.e. PAY TAX and PAY TAX

Want some good advise? emigrate because it will never get any better.

This soap opera (tragedy) gets better and better. After returning 75% of the fleet to lessors (and no doubt paying huge early cancellation penalties), they have now appointed a new CEO, added 1000 additional staff to the ongoing payroll bill and committed R10bn to ‘SAA 2.0’. If only it was RIP SAA. But it isn’t. It’s RIP SA.

Well they’re all set up. All they need now is customers….which they will get…nowhere. Not soon anyway. Enter the taxpayer.Tragic soap opera indeed.

And I will refuse to fly SAA.
And I hope the rest of SA will also boycott this cesspool of corruption.

Yep … if I may expand to “enter the taxpayer’s pension funds.”

There you have it taxpayers! That’s an additional R26 billion to relaunch the same failed airline. This during the worst economic downturn in 100 years, a R200bn tax shortfall, junk status and totally unsustainable government expenditure

The airline has failed under 10 boards, 10 CEO’s and 10 turn around strategies. Of-course none of that matters and actually all that was needed was to rename it SAA version 2 and by magic it will work this time.

It is so utterly infuriating to live under such an incompetent, irrational and state control obsessed ANC!

Poor(er) Tax Payer.

Finally. At least we know we will have an airline to leave South Africa (if Emirates does not resume their flights)

Don’t be so negative. You can get Turkish and Qatari flight out of Maputo. Or Qatari or KLM out of Windhoek. Or Emirates from Harare. Or Qatar from Gabs. Mostly connected by Comair or decent enough roads. No need to give communists more money. They’re like lions and sharks, once they’ve got the taste, they don’t let go.

Thanks for this!

My opinion will be shown in that no one from my family or my business will ever buy a ticket on this airline. A small act of civil disobedience but shared by many to make it a large one. May this airline fail, as it should

Sadly we cannot ‘avoid’ the ANC.

Honest question guys. But if we don’t fly SAA and boycott it, doesn’t it mean that we will be paying anyway and in so doing cutting our noses to spite our face? So wouldn’t it be better if we book SAA and then we don’t have to bail it out with more tax payer money. This government seems committed to continue to bail it out with taxpayer money.

Book SAA to help Gordhan? Does HE, or his cabinet colleagues, help me?

No thx,SAA has too much baggage to use it; it stinks!

So when do they ban other airlines flying in to SA and ban transport across land borders, to maintain their monopoly?

Isn’t this too wonderful. We again have a fully functional airline albeit without any passengers or up to date modern aircraft. We have a brand new CEO. We have lots of cash to play with. We still have sufficient numbers of light fingered leeches around to keep up the airlines acquired track record of filling many unwarranted managerial and political friends wallets with precious resources funded by the taxpayer. Well done to the DPE, the Unions and especially the hidden agenda manipulators hiding in the wings of the fallen SAA.

The acting director-general of the DPE announced the appointment of an acting CEO for the ANC’s air taxi.

Acting taxpayers will be expected to cough up R16 billion to make it fly.

The SCAM continues. Another R10bn of taxpayers’ money on the line for this vanity project.
Concurrently, the government is negotiating a loan from the IMF as they claim they are short of money!!

Very soon we will know how UNTRUSTWORTHY treasury and Mboweni are when they suddenly come up with the R10,4bn new money (as a first installment by tax payers). Keeping the pipe dream in the air will take far more!

Gordhan must be delighted; he manages to stay out of court for transgressions in terms of the companies act – trading while insolvent; no financial statements; etc.
No wonder the finance minister and treasury will come up with an additional R10bn new money to keep Gordhan out of court…

One would have thought Pravin Gordhan was intelligent.

He proved us wrong.

All the more reason for us tax payers to do as much as possible to evade/avoid paying tax.

Income grant coming up, 500 billion on Cov 19 “selective help” tax loss from tobacco and booze sales, most ministers took no pay cut, more tax shortfall, no public service pay cuts, wow please show me the money tree.

Raining money in SA!!

Only remedy – nothing else at our disposal!
Run businesses with cash only!

Louise : Another Method is Never to support any BEE “compliant ” Coys :
I now will not Buy from anyone claiming to be BEE Compliant , especially large cost items eg Cars Etc .
ALL workmen at home are paid cash : No VAT
Enough is enough .

All businesses should move to the taxi-industry mode; of cash only, no tax and threats of violence when Government looks your way. Now that’s transformation!

COVID has opened up a big new opportunity: working from home. OK, not everyone can do it, but a lot more employees are now able to, thanks to the internet, Zoom etc. And there are many legit ways to save by working from home and being a provisional taxpayer.

Parliamentarians will be able to fly to Capetown with lots of social distance.

One per plane…plus a few friends.

Fully booked.

ANC Cadres and family.

Only until they realize they are dying like flies because of it. Even all their stolen money wont save them nor another Gov “Bailout”

Meanwhile the poor black people starve. Black lives don’t matter.

And bewilderingly they keep voting for their persecutors – unless this changes we will continue to see the country descend into a death spiral. I’m not hopeful.

Most of them vote for the ANC. Should we care?

This is not an astonishing result in any way.

An airline we know was flown on nepotism and benevolence for at least the last decade. Inflated invoices and shoddy service short cuts to boot.

Asking the pigs at the trough if they want more Barley, Oats or Bran and then being surprised when they take all three is insanity disguised as naivety, at best.

This result should be completely ignored by the state and handed to a private equity third party who is prepared to come up with the requisites to float the plan. That’s if there is one- this would prove more of a hospital pass than a hand-on I suspect.

The flight path of the taxpayer and the state should exit onto the R21 West at OR Tambo. Take the nearest indicated fuselage, wing or cabin crew hatch as shown by the lights of a silvery moon. Before another take-off.

The idiocy of exhumation and re-hanging.

“Government has welcomed the vote, saying it would provide a “much better outcome for creditors and SAA employees than liquidation”.”

At who’s expense? Us … Get yer money for nothing and your chicks for free …thanks Dire Straits.

In the future people will refer to the time of COVID as the start of the true unraveling of South Africa.

home grown debt trap for your grandchildren to pay

If they could only alone the strategy to be implemented through…successfully. It’s pretty obvious, the BRPs did their work. The fact that “…approaches that government has received from local and international investors and players”…SAA will once more be profitable, and at least employees secure employment.

Now go slow on the booze. The tuff is getting expensive again.

There is no way that the SAA will be or can be profitable. Why should we keep on funding via taxes. Perhaps it is time to consider. Absolutely a huge problem for RSA

. . . and the sad, but laughable,saga continues. Are these creditors mostly SOEs?

“Proven to be attractive to potential investors” Like who? The Taxpayer? #DUDUPART2

Having thrown an atom bomb on our economy, on a failed Covid19 strategy, the politburo, disguised as government, now hands out bundles of fictitious money. “A mieljon for you, a bieljon for you, a trieljon for you.” It is Christmas in July.

A brand NEW airline to emerge, they say.

SAME CORRUPTION, I say!

Miraculously, this new airline will now make a profit all of a sudden? *frown*

“86% of creditors vote in favour of SAA rescue plan”
Of course they would. Who in their right minds will want 3 cents (random number) for R1 owed; if SAA goes into liquidation.

Only because creditors know their bills will be paid with tax payer funded bail outs, this is ridiculous!

Do not support this corruption infested airline!

End of comments.

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