Cabinet backs SAA business rescue process
But the proposed business rescue of SAA was again delayed on Thursday after creditors voted to postpone deliberations on the plan to July 14
The cabinet is backing the department of public enterprises’ call for SAA creditors to vote for the proposed business rescue of the ailing state-owned airline.
It met this week and received a progress report on the business rescue process from the interministerial committee on SAA, chaired by public enterprises minister Pravin Gordhan.
“The cabinet maintains that a positive vote from creditors to finalise the business rescue process is still the most viable and expeditious option for the national carrier to restructure its affairs, which include its business, its debt and other liabilities,” it said in a statement after the meeting.
“The cabinet believes a restructured airline will pursue the transformational agenda, such as the lack of opportunities for the advancement of black pilots after 26 years into our democracy.”
This comes as the proposed business rescue of SAA was again delayed on Thursday after creditors voted to postpone deliberations on the plan to July 14. The postponement was requested by several employee groups and unsecured creditors.
The new date for the meeting is one day before the deadline, by which the department of public enterprise must provide a letter of commitment, with the support of the Treasury, to confirm that it will provide funding for a new SAA.
The process of compiling a business plan for the airline has been stretched over six months instead of the statutory 25 working days outlined in the Companies Act.
The cabinet said on Friday that it supported the proposal for a new airline and efforts to find funding from various sources, including from potential equity partners for the uptake of it.
It said this was the only realistic pathway from which a new, viable airline could provide integrated domestic, regional and international services.
The SAA plan hinges on a transfer from the fiscus made up of R2.8bn in start-up capital, retrenchment pay of R2.2bn as well as other payments, altogether amounting to R10.4bn.
However, in his supplementary budget tabled in parliament on Wednesday, finance minister Tito Mboweni did not provide any additional funding for the airline.
The department of public enterprises has said that there are several interested buyers for SAA, which is another possible avenue for funding.