SAA’s joint business rescue practitioners (BRPs), Les Matuson and Siviwe Dongwana, will meet with SAA’s creditors at 11h00 today (Friday, September 18), after failing to secure the money needed to continue the business rescue.
“The anticipated funding has not been received by the Company in accordance with the commitment from Government to provide the funding for the restructuring of the Company and the implementation of its business rescue plan,” the notice reads.
Louise Brugman, spokesperson for the BRPs, told Travel News: “If there is a decision that needs to be taken on the way forward, then we will need the creditors to vote on that decision, so that we at least know that more than 50% of them want us to proceed in that manner.”
Last week, the BRPs gave government until Thursday, September 17, to secure further funding. 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).
Government has already paid approximately R9,3bn to lenders and the Democratic Alliance said last week that government was under legal notice from the party on the use of taxpayer funds to finance another SAA bailout. “We will not hesitate to go back to court if the Ministers of Public Enterprises and Finance dare to cross this line,” DA member of the Standing Committee on Public Accounts, Alf Lees, said last week.
Following the notice from the BRPs, the Department of Public Enterprises issued a statement saying efforts to locate funding continue and it believes securing a credible strategic equity partner is key to solving the difficulties facing SAA. “Government is working with transaction advisors to assess proposals from several potential strategic equity partners for the airline,” the statement reads.
Speaking to Travel News on Thursday, Alf said he had been told that today, at the eleventh hour, Public Enterprises Minister Pravin Gordhan would likely ask creditors for an extension, again saying that “negotiations [with potential investors] are at an advanced level”. Alf adds that his opinion is that the Minister is aware that the chances are very low of any investor providing the money.
“My information is that the ANC has instructed Finance Minister Tito Mboweni to put the money into the medium-term budget,” said Alf, adding that things therefore needed to be delayed until the speech in October. “Once it has been announced, Parliament could, if it had any backbone, refuse to approve the medium-term budget adjustments, but it’s highly unlikely.”
