The South Africa Government Department of Public Enterprises Welcomes Exit of SAA from Business Rescue
DPE WELCOME EXIT OF THE SAA BUSINESS RESCUE PRACTITIONERS
Pretoria 30 April 2021: The Department of Public Enterprises welcomes the notice of substantial implementation filed by the Business Rescue Practitioners (BRPs) today. This signals the exit of the BRPs at the South African Airways SOC Ltd since the process started in December 2019.
The business rescue process enabled restructuring of SAA, reducing its cost base and its financial liabilities creating a sustainable baseline going into the future. The BRPs are handing over to the SAA Interim Board a solvent business.
However, this does not mean that the work is finished. The Board and Management will be developing and implementing an interim business plan to sustain the operations while a strategic equity partnership (SEP) is being finalised.
Government is in the final stages of negotiations with the preferred SEP, and a purchase and sale agreement should be concluded in the next few weeks. This will enable capital and much needed technical and commercial expertise to be brought in to ensure a competitive flagship carrier emerges.
In the BR Plan, there are liabilities that will be settled over the next three years. These are concurrent creditors and unflown ticket liability. The BRPs and the Creditors have agreed to set up a Receivership to manage the settling of these outstanding liabilities, meaning that SAA will be relieved of the responsibility.
The Interim Board of SAA is mandated to oversee the strategic, financial and operational management of the subsidiaries of SAA, South African Airways Technical (SAAT), Airchefs, Mango SOC Ltd and ensure their commercial sustainability. These subsidiaries will need to be restructured and in some instances, the case for continued existence must be assessed.
The Board and management team will deal with all other residual legal matters including the LRA Section 189s in the legal disputes in the courts with the labour unions and the pilots association.
For Media Enquires contact Richard Mantu on 072 448 1520
Department of Public Enterprises
30 April 2021