An eleventh-hour government commitment to provide funding to SAA was received this morning, shortly ahead of a meeting between SAA’s joint business rescue practitioners and SAA’s creditors.
The meeting was convened by BRPs Les Matuson and Siviwe Dongwana after government missed Wednesday’s deadline to provide the additional funding required to continue the business rescue.
The BRPs require an additional R10,2bn, of which roughly R5bn is immediately needed to pay creditors (R800m), cover restarting costs (R2,2bn) and pay voluntary severance and retrenchment packages (R2bn).
Opening the meeting, Dongwana said that SAA’s funds have been depleted and the BRPs have also exhausted their initiatives to extend the financial runway.
“As the BRPs, we believed that the options available to us coming to this meeting was that we could have a winddown in line with Section 128 1B2 of the [Companies] Act or a liquidation.”
However, Dongwana said that a commitment from government has presented a third, more favourable option.
“We have since received a further communication from government with the support of the National Treasury that indicates that there is a very clear Cabinet commitment to provide funding to SAA to the tune of R10,5bn. The letter also articulates that the mechanisms and the timelines are yet to be finalized.”
Dongwana told creditors that because the letter was only received on Friday morning, time was needed to engage with government to gain a clearer indication of the timelines and the mechanisms as to how the funds will flow into the company.
He said that next week the BRPs will be in a position to come back to affected parties and advise them on the outcome of this engagement.
“If funds flow early enough, then they eliminate the need to deal with the issue of a winddown or liquidation.”
