BUSINESS MAVERICK: Flying into flak: Another snag and delay for the rescue of SAA

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If there are further objections to the SAA business rescue plan, which would affect its approval, the rescue practitioners are required by the Companies Act to declare that SAA has no reasonable prospects of being rescued. This would pave the way for SAA to be placed under liquidation, which implies its death.

The SAA business rescue proceedings have hit a snag that will further delay its conclusion as a crucial creditors’ meeting – aimed at voting for a plan to restructure the troubled airline – has been postponed to July.

This is another twist in the serially delayed SAA rescue proceedings, which have been ongoing for nearly seven months. According to the Companies Act, which provides for business rescue proceedings in SA, such proceedings should ideally last for three months. “Unfortunately, we cannot support the business rescue plan in its current form… It has little chance of launching a new SAA and appears to target labour, which is the worst affected due to the loss of jobs,” said a representative of the three unions at the creditors’ meeting.The postponement of the creditors’ meeting to 14 July was voted in favour by 69% of SAA creditors.

Crucially, the next creditors’ meeting is one day before a deadline set by Dongwana and Matuson for the government to indicate whether it will provide further funding to SAA. By 15 July, Dongwana and Matuson want a letter from the Department of Public Enterprises, concurred by the National Treasury, indicating that it will fund SAA’s funding requirements proposed by the rescue plan.

 

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