SAA rescue plan calls for taxpayers to cough up further R4.6bn

JOHANNESBURG - A draft plan proposed by the business rescue practitioners of South African Airways calls for taxpayers to cough up about R4.6 billion more to save the debt-laden struggling national flag carrier.

The draft proposal, which has been seen by Fin24, makes provision for

• a further working capital injection of R2 billion to restart the airline after the coronavirus pandemic is over;

• R2 billion for retrenching about 48 percent of SAA’s about 5, 000 employees; and

• R600 million to be distributed to general concurrent creditors.

This is in addition to R16.4bn already allocated to the national airline in past budgets for the repayment of historic guaranteed debt.

SAA went into voluntary business rescue in early December 2019, and had most of its routes cut earlier in the year in an effort to save costs. Since the coronavirus flight bans came into place, SAA has basically only flown ad hoc cargo and repatriation flights.

The draft plan, which is now open for comment by affected parties, including the state as shareholder, proposes a “new SAA” to fall under a new holding company that would also oversee SAA City Centre (SACC) ticketing offices, SAA Technical, Air Chefs, and state-owned low-cost subsidiary airline Mango.

The airline’s business rescue practitioners,

Les Matuson and Siviwe Dongwana, said in a statement on Monday that they would not be commenting on the “leaked draft.”

“Given that, it is a draft and has not received agreement or comment from any of the relevant affected persons, we will not comment on the leaked draft to the media and will await input from the affected parties as is prescribed by the Companies Act. To assume and comment on this draft as if it is the final version would be very irresponsible.”

Affected parties, including creditors, unions and government as shareholder, now have to submit feedback on the draft plan, which may still change. – FIN24.