Provisional liquidation for Velvet Sky

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IOL velvet sky SUPPLIED liquidated: Some customers who bought Velvet Sky plane tickets have been refunded in full thanks to chargeback.

It looks as if it’s the end of the runway for broke airline Velvet Sky after a Pietermaritzburg High Court judgment placed the airline under provisional liquidation.

The low-cost airline approached the courts in a last-ditch attempt on Friday to keep from plummeting to the ground, but Judge Shyam Gyanda ruled that there was no hope of rescuing the Durban airline.

According to court papers, Velvet Sky’s employees had not been paid in three months and the airline has been grounded since February 27. Its offices have been closed for the past month.

Last month the airline fought an application by its largest creditor, BP Southern Africa, to have it liquidated, citing a business rescue plan to save it.

On February 24, BP applied to the high court for the provisional liquidation of the airline, which allegedly owed it R29 million for aviation fuel.

The airline made no mention of this business plan on Friday, but instead cited another possible business rescue plan – this time a partnership with the Malawian government.

BP’s advocate, Anna Annandale SC, argued that the airline had not even explained what had become of its previous business rescue plan but was already proposing another.

She said this was a ploy to delay court proceedings.

Gyanda agreed, saying that if he postponed the provisional liquidation any further it would only serve to create false hope and prolong the agony of Velvet Sky employees.

In court papers filed in March, the airline confirmed it had debts of about R100m and that its only assets were desks, chairs and computers. -Daily News

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