‘It’s rescue plan or bust for SAA’

● Public enterprises calls on role players for support

The department of public enterprises is urging employees, unions and creditors to support the business rescue plan for SAA, saying a vote against it would result in the protracted and costly liquidation of the stricken national carrier.

The department said yesterday it wanted to “caution” SAA employees, unions and creditors that liquidation, which would involve the winding down of the airline and its assets, would “lead to financial hardship for employees and substantial undervaluation of assets”.

“All SAA stakeholders who are in a position to either support or reject a business rescue plan for SAA should realise that business rescue provides a better outcome than liquidation and should be supported for their collective interests.”

But air transport industry consultancy Plane Talking MD Linden Birns said the statement suggested there were “only two options” for creditors and other stakeholders — namely, to accept the business rescue plan that has been proposed, or liquidation.

“That is wrong. The participants in the creditors’ meeting last week called for the meeting to be adjourned because they raised a number of issues and concerns with the deficiencies in the current plan.

“There was no vote on whether to adopt a business rescue plan.

“What they said was that they had concerns about the plan that was put forward,” Birns said.

He said there had been questions from both creditors and unions about the plausibility of the plan and on what its assumptions and projections for the future were based.

Birns said he did not know what the rationale was for releasing the statement, but that the department was saying “it’s our way or the highway”.

He said announcements last week by the department, including one about it receiving several unsolicited offers for SAA, were perplexing.

“OK, what does that constitute? I can walk into a Ferrari showroom tomorrow and express an interest in a car.

“It doesn’t mean I’m in a position to buy it. When were these offers received?”

The department’s other announcement, that it was open to strategic equity partners, went further, saying the state did not have to be a major shareholder in the new airline.

“Hang on a minute, your entire argument for this business rescue has been predicated on an ideological stance that the state must control the airline.

“Now you are saying you want to bring in investors. Investors don’t invest for philanthropic reasons,” Birns said.

“How do you marry those two outlooks if you are going to run a successful airline?”

Birns said if the state had changed its position on ownership of the airline, why was it pursuing a business rescue?

“They could allow SAA to be liquidated and allow people with money to start a new airline.”

Separate proposals by SA Airlink and SAA unions on Thursday last week calling for the adjournment of the creditors’ meeting to vote on the business rescue plan were successful.

This means SAA’s creditors will now vote on the business rescue plan only on July 14.

Referring to the rescheduling of the creditors’ meeting, the department’s statement said “a vote in favour of the plan by 75% of the voting interests would be required to carry the vote”.

“A vote against the plan would result in the protracted and costly liquidation of the airline.”

SAA’s creditors will now vote on the business rescue plan only on July 14