South African Airways (SAA) is once again facing the prospect of liquidation as it has failed to secure the necessary short-term funding from government to continue operating.
Last week the airline’s Business Rescue Practioners (BRPs) said that the existing funds which are available for operational expenditure are ‘near depletion’.
The BRPs had previously said that the national carrier requires R10.1 billion by 17 September. They will now hold a credit meeting on Friday (18 September) to review the business plan.
“The anticipated funding has not been received by the company in accordance with the commitment from Government to provide the funding for the restructuring of the company and the implementation of its business rescue plan,” the BRPs said in a statement.
“Accordingly a meeting of creditors will be convened on 18 September 2020 at 11h00 to engage with affected persons on this issue and the proposed future of the company taking into account all relevant factors.”
In its own statement, the Department of Public Enterprises (DPE) said it is aware of a creditors meeting called to discuss the future of the business rescue plan for the airline, and protests scheduled to be held outside the airline’s offices on Friday.
It added that efforts to locate funding sources continue. “The DPE remains sympathetic and deeply mindful of the plight of SAA employees.”
The department said that the key to solving the difficulties facing SAA is:
- The finalisation and implementation of the business rescue process;
- Followed by the start of a restructured airline, appointment of a new board and executive team;
- And securing a credible strategic equity partner who can introduce the required technical, financial, and operational expertise into the business.
“At the same time, the government is working with transaction advisors to assess proposals from several potential strategic equity partners for the airline.
“The department recognises the interests of workers’ and creditors. We call upon employees and the creditors to be patient while we conclude the efforts to find a constructive outcome,” it said.