SAA in search of new turnaround boss
British airline expert Peter Davies to step down as chief restructuring officer
The British airline turnaround expert Peter Davies is to step down as the chief restructuring officer (CRO) of SAA, a spokesperson for the airline said on Wednesday.
Davies, who was appointed less than two years ago, will remain an adviser to the board and a new full-time CRO will be sought. Davies, who was formerly head of Air Malta and Brussels Airlines, had been based in the UK during his tenure.
SAA spokesperson Tlali Tlali said on Wednesday that the airline had advertised the position of the CRO to enable a successor to assume the responsibilities held by Davies. Lenders had required that a CRO be put in place at the airline. It is now also a condition of the Treasury that a CRO be appointed in state-owned enterprises that receive government bailouts.
“Peter Davies was appointed as CRO for the airline on a fixed-term contract. Because he has continued to be based in the UK, SAA has agreed with him that he transitions to being an adviser to the board. He will continue to hold the position of the CRO until the new CRO is appointed, thereafter his responsibilities will only be those of an adviser to the board,” said Tlali.
The position of CEO was also advertised last weekend. Former CEO Vuyani Jarana resigned in June and left immediately after the board said he should not serve a notice period. The chair of SAA, JB Magwaza, resigned in July.
SAA is holding out for a R3.5bn bailout from the Treasury once the Special Appropriation Bill has been processed and signed by President Cyril Ramaphosa. The bailout will be used to repay short-term bridging finance raised by the airline in January to fund operations.
In addition to the bailout, SAA requires another R4bn to cover its working capital for 2019/2020 and must either roll over or repay R9.2bn of debt at the end of this month.
But lenders remain cautious. Government officials said last month that a consortium of banks had agreed to lend a first tranche of the R4bn once the short-term loan had been repaid. Before the second tranche is advanced banks have insisted that a plan to repay the R9.2bn be put on the table.
Public enterprises minister Pravin Gordhan is hoping to fix up SAA for a partial sale to a partner airline. The government has said that it aims to sell a stake of less than 50% once the airline is in better shape financially.
But while finance minister Tito Mboweni appears to have agreed that SAA will receive the R3.5bn by the end of September, he has offered no commitments on how the R9.2bn will be repaid.
Mboweni is on record as saying that SAA should be sold and that government money would be better spent on trains, ridden by poor people, than planes used by the rich.