Turnaround specialist to lead SAA rescue

● Seasoned adviser Matuson to oversee salvaging of embattled national airline

The man who will oversee the business rescue of embattled national carrier SAA has been named as turnaround specialist Les Matuson.

He is a seasoned adviser and business rescue practitioner who has been in the field for almost 35 years, News24 reported on Thursday night.

According to the website Matuson & Associates, Matuson has supervised recoveries “in many large, high-profile corporate matters, including Ellerines”.

Earlier on Thursday, public enterprises minister Pravin Gordhan announced that SAA would get R2bn in cash from the National Treasury and a further R2bn loan guarantee to raise finance from commercial banks to facilitate the business rescue process.

The airline, which has been placed in business rescue by its board of directors, had been unable to raise finance from either the Treasury or lenders to continue operating.

The funding will enable the company to carry on while it is being restructured.

“It must be clear that this is not a bailout.

“This is the provision of financial assistance to facilitate a radical restructure of the airline,” Gordhan said.

The R2bn in cash would be provided in a “fiscally neutral way”, which means the government will need to raise the money from, for instance, the sale of state assets.

The R2bn bank loan will be repaid by the Treasury from future budget appropriations.

The government has also given lenders a commitment that the existing debt of R9.2bn and interest will be fully repaid and will not be affected by business rescue.

This amount has already been pencilled into the government’s medium-term budget.

That means that lenders will not be subjected to a haircut, which is typically the case when an overindebted company undergoes business rescue.

The objective of the process was to avoid a disorderly collapse of the airline and create a viable and financially stable entity that would no longer be dependent on the Treasury for its survival.

Gordhan said the initiative demonstrated that the government would undertake the necessary bold steps to reposition its assets in such a way that they did not continue to depend on the public purse.

In a statement, the SAA board said the decision was unanimous and would result in a better return for the company’s creditors and shareholders than would result from any other available solution.

The alternative of liquidation would have resulted in heavy losses as SAA’s liabilities far exceed its assets.

“SAA understands this decision presents many challenges and uncertainties for its staff.

“The company will engage in support for all employee groups. ”—