SAA board unanimously backs business rescue
SAA said on Thursday its board of directors had unanimously agreed to place the company into business rescue at the earliest opportunity.
The embattled airline said it would operate a new provisional timetable and would publish details shortly, while subsidiary airline Mango would continue as scheduled.
Public enterprises minister Pravin Gordhan said on Wednesday business rescue was the best way of avoiding a disorderly implosion of the airline.
The loss-making airline has been unable to raise funding necessary to continue operations.
“The considered and unanimous conclusion has been to place the company into business rescue in order to create a better return for the company’s creditors and shareholders than would result from any other available solution,” SAA said in a statement.
SAA is still likely to end up in liquidation, said Intellidex analyst Peter Attard Montalto in a note, though an additional R4bn in funding should enable it to operate in December.
This funding, including R2bn in guarantees from the Treasury, and R2bn in cash, had negative implications for SA’s credit rating, he said.