BRPs hit back at criticism of their processes
JOHANNESBURG – SAA Business Rescue Practitioners (BRPs) on Wednesday hit back at the government and unions’ criticism of their processes, charging that the airline’s rescue plan was still on track.
Les Matuson and Siviwe Dongwana defended their reputation and refuted claims that they spent millions on international aviation experts.
The BRPs said they still believed SAA could be saved, but would continue engaging the government on the mooted new airline.
They said their use of aviation consultants was legal. “In terms of the Companies Act, the BRPs assume ultimate responsibility for management and all the powers of the board of an entity in business rescue,” they said.
“The BRPs’ role therefore requires a supporting team of highly skilled professionals, especially in a company of the size and complexity of SAA. The BRP fees, should therefore be assessed in the context of a team, rather than on an individual BRP basis.
“Every member of the BRP team and associated consultants maintain a detailed schedule of hours that have been expended on the assignment. All fees are included in all monthly management accounts,” the said.
Early this month, Public Enterprises Minister Pravin Gordhan launched a scathing criticism of the BRPs for over-reliance on consultants to complete the process, charging that they had failed to account for the money they had spent.
Gordhan said consultants had been brought in from overseas, but the BRPs could not show what they had done.
He said the BRPs had failed to cut their fees, and only the unions had come to the party.
Yesterday, Matuson and Dongwana said that they had used R10 billion between December 2019 to April 2020.
They said that this was far less than the R300bn operating costs SAA recorded during the 2017 to 2019 financial years.
“Thus, looked at from this perspective, the average monthly costs incurred to continue to operate SAA for the BR (business rescue) five-month period amounted to R2bn per month,” the BRPs said.
“The BRPs therefore succeeded in reducing the costs of SAA’s operational costs by R500 million a month.”
Matuson and Dongwana said business rescue required a consultative process.
They said they had established creditors and employee committees, regular updates on the process and reports to the lenders that accounted for post-commencement finance provided to SAA.
The BRPs also defended the time delays in the rescue plan and said that although the Companies Act requires the publication of the BR plan within 25 business days of their appointment, the size and complexity of the airline and the fact it filed for business rescue during the festive season made it impossible to meet the requirement.
The BRPs said they had engaged the government on the route network for the restructured SAA to enable the sourcing of funding to implement the restructuring plan.
“The emergence of Covid-19 and consequent travel ban forced SAA to ground all aircraft. Given the fact that the shareholder had not, at that time, formally communicated its commitment to us to fund the restructuring of SAA and taking into account the uncertainties brought about by the lockdown, we recommended to the shareholder a care and maintenance plan.”
The BRPs said the only option left was for them to propose a plan that would provide creditors with a better return through a structured wind down, rather than liquidation.
“A further announcement is still to be made on this as well as an agreed timeline for the consultation on the business rescue plan, as well as its publication,” the BRPs said.