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Union files court case to force SAA rescue

’11 000 workers will lose their jobs and a debt burden of billions of rands will have to be absorbed by the Treasury if there is no radical intervention’ – Solidarity.

WATCH: Solidarity COO Dirk Hermann on the union’s reasoning behind its SAA business rescue application, and its potential effects.

A South African union filed a case on Thursday asking a court to subject the distressed state-owned airline SAA to a business rescue, with the aim of restoring it to profitability.

Solidarity said it would “mean that the court can appoint a business rescue practitioner with comprehensive powers to rescue the airline.”

“We are profoundly aware of the crisis SAA finds itself in. SAA is heading for liquidation which will have huge consequences for employees, the South African economy and for taxpayers. In all, 11 000 workers will lose their jobs and a debt burden of billions of rands will have to be absorbed by the Treasury if there is no radical intervention. A business rescue application is the only remaining option to limit the damage. Recent events at SAA accelerated the crisis. SAA’s Day Zero is imminent. The current shareholder has lost control over finding a solution for SAA,” said Solidarity COO Dirk Hermann.

The union says in the application it’s acting on behalf of its SAA members and those in public enterprises in all SA sectors “and on behalf of every South African who is paying tax”.

It says the Companies Act allows for public enterprises to be placed in business rescue and for trade unions to bring such an application.

The union sent the following tweets:

Solidarity says if its application is successful, it would be the first time that an SOE is placed in business rescue. “This will mean that the court can appoint a business rescue practitioner with comprehensive powers to rescue the airline.”

A crippling six-day strike in the past week has pushed South African airways to the brink of financial collapse. Such a rescue would hand over control to a busi­ness res­cue prac­ti­tioner who then tries to restore the com­pany in order to avoid liquidation. 

Developing story.

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“the court can appoint a business rescue practitioner with comprehensive powers to rescue the airline”

And what exactly would the “rescue practitioner” do? He can stand on his head for all I care as long as these “comprehensive powers” don’t involve more stealing more money from taxpayers.

Sounds like an attempt by unions to hold out the begging bowl for yet more bailout money from government (taxpayer’s money) to rescue a failed stinking business that does not work and SHOULD NOT BE RESCUED!

And he / she will earn a bucket on fees – and make no difference whatsoever in the bottom line of S A A – can it!

no…that is not how business rescue work..in short the Rescuer must meet with creditors and if not mistaken give an opinion if it can be rescued within 10 days…if not..liquadation…maybe what government want then they cannot be blamed for many job losses

It is a good move and should have been done long ago.

There are still 5 000 employees who had nothing to do with the state that SAA finds itself in – apart from the fact that there are too many of them and their salaries are too high.

A business rescue practitioner can restructure, sell, retrench, compromise and hopefully retain the skilled workers.

Agreed. I think it is a very smart strategic move. Business rescue will allow for the restructuring which the government it too scared to implement for fear of alienating the voters. In this scenario they can say “sorry it’s not us, its them…”

There is nothing to rescue.
And the governments hands are tied. If they give SAA another bailout, Moodys will downgrade SA in Feb and S&P will move SA further into junk. I think this is the end of SAA as an SOE.
It will be liquidated and privatised.
Gordhan said in New York earlier this week that SAA is not too big to fail. This was a clear indication that no bailout is coming. (or so I hope at least)

Actually the rescue practitioner has a second option – to liquidate the company if it is clearly not in a position to be rescued. In my opinion this will be the only option is SAA’s case. The numbers dictate this.

Does this not put the proverbial cat amongst the pigeons?

What if the court decides liquidation is preferable. Happened before.

Would be the perfect outcome for the taxpayer but unions might not be so popular.

One the one side you have a certain labour union (Solidarity) doing an effort to try and save the employer (to the longterm benefit of its members), and on the other side you have other unions (NUMSA who has a Maxist, communist strance) want to grind the whole airline industry to a halt, for the short-term benefit of its members.

Long-term vs short-term.

@ Michael from Klerks, there is only relative difference between these unions. Both are selfish and NOT really farsighted. The very best for taxpayers and SA as a whole is to liquidate SAA ASAP.
RIP SAA.
Solidarity might not be Marxist and militant, it still only thinks for their members.

Pretty blinkered view. I happen to think unions in Germany do a good job. If Solidarity can emulate them, it is a good outcome.

Exactly. I am quite outspoken against labour unions in general, but I agree with Solidarity and I support their actions because they understand the business case. Solidarity wants a win-win situation. I salute their members for this. They are the only viable labour union in the country. They understand that the business and the country has to benefit, in order for them to benefit.

And the rescuer will have to retrench huge numbers amongst other things. Good luck. Shut the place /airline ASAP

You are waay to kind to call this long/short term. This is greedy brainless clueless arrogant fools v some kind of logic.However-Justin is right-there is no business to rescue. It is all gone and de facto and de jure insolvent. Crime to proceed trading in these circumstances. Liquidation only option.

I agree with the sentiment however after watching their latest media presentation I think Solidarity are flogging a dead horse! It was embarrassing, amateurish and reeked of the normal Cadre deployment nepotism, that we have become accustomed to! If this has filtered down, then forget about a Business practitioner turning it around, the will to work and succeed is not there!

Let me try again. Please also expand on race and language representation of other unions, such as NUMSA when reporting.

Thank you this is the only union referred to by race and language.

Have never heard Num being referred to as a black, ethnic language union.

Excellent point. Lazy journo’s ape their favourite ANC/EFF politicians in keeping an unnecessary racist narrative alive. They should not expect to be supported, protected or taken seriously.

Using the “A” word here is a no-no. As is using that language in real life.

Shame. Beyond you. Sorry.

Here’s a conundrum – SAA is bankrupt and is in desperate need of a further bail – out. The Numsa Trade gang want a further loan to keep this entity afloat. The only source of a further bail out would have to via Treasury – who are already in a R 50 billion shortfall between revenue collections because of the diminishing number of tax payer numbers – whether it be individual or company failures. The only way Treasury can fill this gap and future gaps is to turn to a “lender of last resort” which is no the SA government. These loans are draconian in structure and repayment which means the government will have a lose; lose situation and will merely burden the remaining over stretched taxpayer.
So in essence there will never be relief for the taxpayer and he/she/they will never reap any benefits from their tax Rands.
The government and the SoE’s management needs to be thrown in jail for treason – as this is what the current situation amounts to

Close it now please – this is an airline that cannot work out how to offer direct flights from Cape Town to London while BA is operating three a day at present. The slack will be swiftly taken up by other local and international airlines while the billions of ZAR it chews up can be used more productively. Please put it, and us, out of the collective misery SAA creates.

> white, Afrikaans-speaking employees

Ok so?

Saa workers who might loose their jobs, saldanha steel, farm workers(drought).
I’m scared.

Lol. What debt burden will be absorbed by treasury? That debt has long ago been written off…

By keeping SAA alive, the debt burden will just continue and grow…

Let them die, the debt burden dies with them.

If liquidated, what will happen to the debt? Is the debt not guaranteed by the government? Elsewhere I read that since 1994 SAA has received something like R57 billion in bailouts.

This is the union showing up a day late and a dollar short. Even worse it’s like they showed up at the site of a plane crash with a document that says the aircraft is still serviceable, while it’s clear to bystanders, engineers, technicians, and generally knowledgeable people that the wreckage can only be scrapped.

Could have filed this court case anytime over the last decade. Very telling that this is only happening now.

End of comments.

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