South African Airways delays submission of business rescue plan
South African Airways’ business rescue practitioners (BRPs) Les Matuson and Siviwe Dongwana have sought creditor approval for permission to further extend the publication of the rescue plan from February 28 to March 31, 2020.
March 03, 2020: In a statement dated February 26, South African Airways’ business rescue practitioners (BRPs) Les Matuson and Siviwe Dongwana have sought creditor approval for permission to further extend the publication of the rescue plan from February 28 to March 31, 2020. A majority of creditors are said to have approved the proposal.
"The practitioners and SAA, with the assistance of distressed aviation experts, have since evaluated various restructuring scenarios (which would present the best opportunity to deliver a viable airline), taking into consideration the distressed circumstances of SAA, the funding required and timing available to implement a viable restructuring, and have identified and developed a proposed restructuring option," the statement read.
“We believe that a further extension of one month will allow for sufficient time for us to finalise the Plan, given the complexity and extent of engagement that is required in a business of this size. We then intend to communicate the Plan to the creditors' committee, the employees' committee, and the shareholder, prior to the formal publication of the Plan,” it stated.
In the 2020-21 budget announced last week, minister of finance Tito Mboweni allocated a total of ZAR16.4 billion ($1.06 billion) to allow SAA to repay guaranteed debt and interest costs. This year alone, ZAR10.3 billion ($660 million) has been set aside for SAA while ZAR4.3 billion ($270 million) and ZAR1.8 billion ($110 million) have been budgeted for 2021 and 2022, respectively. Since 2008/09, the flag carrier has incurred net losses of over ZAR32 billion ($2.04 billion). As such, the government anticipates that additional funding will be required to cover restructuring costs in line with the business rescue plan, once it is unveiled.
The airline has not released its financial statements for the past two years in the fear of liquidation.