Business rescue practitioners seek support for doubling of hourly rate

COMAIR’S business rescue practitioners have requested further remuneration through a proposal for a revised hourly rate of double the current rate effective from the commencement of business rescue proceedings on May 5.

Comair, which operates Kulula and British Airways, entered business rescue in May after it was forced to abandon a turnaround strategy to fix its financial situation as the Covid-19 disruption dealt it massive blow.

The joint BRPs, Messrs Collyer and Ferguson, said in a statement yesterday that the hourly tariff of R2 000 had not been updated since the publication of the Companies Regulations in 2011.

They said the tariff was no longer market-related for the specialist skills and expertise required of the BRPs for a company the size and complexity of Comair and proposed a revised market-related hourly rate of R4 000, excluding VAT.

The BRPs sought the support of the creditors for their proposal, in whole or in part, to become a final and binding agreement with Comair, if supported in terms of the Companies Act.

“This proposal will become final and binding upon the support of the holders of a majority of the creditors’ voting interests present and voting at the aforesaid meeting. The company’s shareholders’ voting rights… will, unfortunately, be nil, as the shareholders of the company would not be entitled to a portion of the residual value of the company on its winding up, in terms of the estimated liquidation dividend that has been independently calculated by PwC,” a Sens statement reads.

The BRPs also proposed that Comair and Redford Capital, an advisory services company which the BRPs are directors of, conclude an agreement for a monthly retainer fee of R250 000 and a success fee calculated at 1 percent of the gross funding raised for the company in the course of its business rescue proceedings.

This excludes short-term interim bridge financing received by the company from lenders up to the point of the adoption of a business rescue plan to facilitate such adoption.

In the course of this process, Redford Capital has engaged with 47 parties, received 19 signed non-disclosure and confidentiality agreements, and received four expressions of interest.

Comair’s creditors in June granted the BRPs an extension to publish the business rescue plan after an interested investor group requested more time to progress its offer.