Provisional liquidators have been appointed by the Master of the Court to move forward with the liquidation of STA Travel South Africa. The South African agency announced that it would cease trading on August 25 after news broke worldwide that STA International had filed for insolvency.
A report released this month by the joint provisional liquidators, JJ Steenkamp and CA Jones, has revealed a grim picture of the state of the South African agency’s affairs. Its liabilities are currently estimated to be at least R213,5m, and its assets amount to R3,7m. According to the liquidators the money held in STA Travel South Africa’s FNB money market account has already been seized, as it was owed to Iata for the agency’s guarantee.
Over R2m is currently owed to employees. Travel News understands, from speaking to ex-employees, that staff have not been paid since July.
STA Travel International has submitted a claim for just over R115,5m, which it believes is owed to it by the South African agency. So far, 27 000 customers have submitted claims for unfulfilled bookings amounting to R91m.
STA Travel (SA) traded out of 22 outlets across South Africa and although its shop fittings, furnishing and equipment were recorded with a nett book value of slightly over R4,8m, the provisional liquidators believe that only about half a million of this is likely to be realised from saleable assets. Much of the furniture and equipment on the premises is also expected to be encumbered to landlords, who are owed rent by the travel company.
Owner of Sure Map Travel, Melissa Philips, told Travel News that she had lost two large bookings to STA Travel in January. "While we could match the airfare, we could not responsibly offer the same payment terms. At the time STA Travel South Africa was offering to secure December airfares with only a 10% deposit collected on the ticket price. According to the invoice that my clients sent to me, full prepayment of the airfare was only due a month before travel and STA Travel offered to guarantee the exchange rate. At the time I wondered how they were able to do this," said Melissa.
The liquidators can be contacted on 021 271 0415 or on jurgens@jjsadmin.co.za. They have advised creditors who still wish to submit their claims that there appears to be no danger of a contribution. Creditors have also been advised to terminate the various existing leases and rentals to prevent unnecessary costs from accruing. A first meeting of creditors and shareholders will also be announced in due course.
SA operators burnt
Md of Cape Xtreme Adventure Tours, Barry O’Donoghue, has been a supplier to STA Travel International for 10 years. He told Travel News that he was one of a number of South African operators that were owed money by the international agency. Barry said he was last paid by STA Travel in February and that almost R300 000 was still owed to Cape Xtreme Adventure Tours. He has received no official communication from the agency about the way forward. The four emails that he sent to the international liquidator have gone unanswered. Abta (the Association of British Travel Agents) has advised him that STA clients may get in touch with Abta to enquire about recourse for bookings that have not been paid by STA Travel, but they are unable to assist with any recourse for STA Travel’s suppliers.
Barry said the worst part of the situation was that STA Travel customers, who paid the agency in full for trips, were contacting Cape Extreme Adventure Tours directly for assistance.
“All we can do at this point is to advise clients that we have had no communications from STA Travel about their bookings and that no payment has been received for them. I would love to help these people but we are already out of pocket for a substantial amount of money, which was desperately needed during lockdown to pay our staff and hold on to our vehicles. Sadly, we simply aren’t in a position to incur further debt by running tours when no money has been received for them,” said Barry.
An airline source, who wished to remain anonymous, said the majority of STA flight bookings were issued on STA ‘blue ticket’ paper. Travel News understands that STA had global contracts in place for its ‘blue ticket’ deals, which allowed flexibility relating to date changes and payment terms. The source said airlines had been somewhat protected from the liquidation of the agency due to this arrangement, as clients had to direct claims to the liquidators rather than the airlines, as the blue tickets had not been issued on airline paper.
