Government currently reviewing SAA business rescue plan set to cost billions
The Department of Public Enterprises has denied claims that it has approved the plan.
The Public Enterprises Department said it was reviewing the draft plan of the South African Airways (SAA) business rescue practitioners set to cost billions of rands.
In a statement, the department denied claims that it had approved the SAA business practitioners’ rescue plan.
“Government (cabinet) has not discussed the plan yet and no decisions have been taken on some of the proposals it contains,” the statement said.
According to practitioners Siviwe Dongwana and Les Matuson the government, as the shareholder of SAA, supports a business rescue which results in a viable and sustainable national flag carrier.
The practitioners stated government as the main stakeholder consequently and subjectively adopted this business rescue plan.
The proposed restructure started with a working capital injection needed to restart the airline post the Covid-19 related travel bans. It needed the following:
– Initial working capital injection needed not less than R2-billion
– Retrenchment of employees, R2-billion
– Payment of lenders, R16,4-billion
– Payment of the general concurrent creditors, R600-million
This proposal was said to be part of a plan for a re-imagined “new airline’” to be established as a state-owned company by the government.
“The government has embraced the restructuring process as part of a path to a new, dynamic and financially viable airline that will serve South Africa’s economic and strategic interests.
“We will review the plan, explore various funding options, and communicate our decisions in due course,” the statement said.
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A DA member of the standing committee on public accounts, MP Alf Lees, has rejected the proposal.
He referred to the proposal as “insanity “ and should not be given any “serious consideration”.
“The only credible course of action for the BRPs (business rescue practitioner) is to apply to the court for the liquidation of SAA as is required by section 81 of the companies act.”
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