Friday, 18 September 2020
Pretoria: The Department of Public Enterprise (DPE) on Friday confirmed that government will reprioritise funds to finalise the restructuring of South African Airways (SAA) and the implementation of the airline’s business rescue plan.
The DPE said an announcement to this effect will be made in the Adjustments Appropriation Bill, which will soon be introduced in Parliament.
“The national carrier will not be liquidated. Because the restructuring process should be brought closer to finalisation in the next few weeks, lending institutions will be requested to finance the restructuring process and honour commitments for voluntary severance packages and retrenchments.
“At the same time, the DPE will continue to assess the 20 unsolicited expressions of interest from private sector funders, private equity investors and partners for a future restructured SAA.
“The DPE is sympathetic to the plight of SAA employees, while continuing to work with other government departments, including National Treasury, to make sure that the airline’s restructuring plan will be successfully implemented,” the department said.
In charting the way forward, the DPE believes the key to solving the difficulties at SAA is the finalisation and implementation of the business rescue process, followed by the start of a restructured airline and appointment of new non-executive directors and leadership team, including securing a credible strategic equity partner that can introduce the required technical, financial, and operational expertise into the business.
Public enterprises calls for patience on SAA matter
“The department is aware of a creditors meeting called to discuss the future of the business rescue plan for South African Airways and protests scheduled to be held outside the airline’s offices on Friday. Efforts to locate funding sources continue. The DPE remains sympathetic and deeply mindful of the plight of SAA employees,” the department said.
In charting a way forward, the DPE believes critical to solving the difficulties facing SAA is:
- the finalisation and implementation of the business rescue process,
- followed by the start of a restructured airline, appointment of a new board and executive team,
- and securing a credible strategic equity partner who can introduce the required technical, financial, and operational expertise into the business.
In a statement on Thursday, the department said government is working with transaction advisors to assess proposals from several potential strategic equity partners for the airline.
“The department recognises the interests of workers’ and creditors.”
It was reported on Thursday that administrators of the airline called creditors to Friday’s meeting after government missed the deadline to make funding available for the airline’s restructuring plan.
SAA was placed under business rescue in December 2019.