Pravin Gordhan to present ‘alternative’ SAA plan
The minister’s plan has been developed with trade unions and a business consultancy
Public enterprises minister Pravin Gordhan will, on Friday, present “an alternative” plan for the rescue of SAA, developed with the help of trade unions and a business consultancy that previously worked with the airline.
The plan is to be presented to business rescue practitioners Les Matuson and Siviwe Dongwana in what looks to be a tense showdown, after Gordhan publicly trashed their work on Wednesday evening and questioned the use of the R5.5bn provided to fund the rescue, but which is now depleted.
Gordhan also accused Matuson and Dongwana of having caused countless delays to the finalisation of the business rescue plan. SAA has been in business rescue since December 5. Under normal circumstances, a business rescue plan must be put to creditors for approval within 30 days, but extensions to at least 60 days are common.
After an initial agreement to table the plan at the end of February, the business rescue practitioners requested two further extensions to the end of March and the end of May. They also informed Gordhan that to save the airline in the form that would meet government approval — as a majority state-owned, national flag carrier — would cost a further R7.7bn.
In April, Gordhan informed them that government was unable to provide any further funding. Matuson and Dongwana, who have said that they could not produce a viable rescue plan without the funding in place, announced to creditors that only two options remain: a structured wind-down or liquidation. A wind-down involves the packaging and sale of assets, in the form of new businesses, where possible.
Gordhan told MPs on Wednesday evening that “there would be no fire sale of assets and no move towards liquidation”. He has, over the past two weeks, concluded a “leadership compact” with trade unions on an agreed vision for a new airline.
On Thursday, Gordhan said: “The [business rescue] plan could have been concluded long ago. They did not do that. Now we are saying, instead of moving to liquidation or wholesale sale of assets, we are proposing an alternative route. They have finally agreed to talk about this. So we need to find money from within their cash, plus contribution from employees, so that the runway is increased, which gives us time to resolve the future path soonest.”
Matuson and Dongwana have told creditors that there is no more cash in the business. Employees, who are part of a retrenchment process under the Labour Relations Act, are on unpaid leave as from May 1. The rescue practitioners have informed employees that retrenchment packages will not be paid now but at the end of process, depending on the funds raised.
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