Comair gets cash offer
JOHANNESBURG – Administrators in charge of South African airline Comair said on Tuesday that they had received a cash offer for the carrier from a company and they would require a week to secure the funding.
The administrators, who had been expected to present a restructuring plan for the airline on Tuesday, asked creditors for another week – until June 30 – to finalise the offer before presenting the plan.
Comair had to file for business rescue, a form of bankruptcy protection, in May after a President Cyril Ramaphosa announced nationwide lockdown to curb the spread of coronavirus, which forced airlines to suspend all commercial flights. It said last month that it was unable to meet its debt obligations as it was not generating any cash.
The administrators said in a statement that they had “received a non-binding expression of interest for cash funding in the form of debt, equity and post-commencement funding”.
“The practitioners (administrators) require that this interested group make a binding offer, that can be set out with reasonably sufficient detail in the business rescue plan,” read the statement.
Earlier this month the business rescue practitioners confirmed they were in discussions with funders to recapitalise the airline in order to resume domestic passenger operations by November 1. More than 30 potential funders had been contacted and six were progressing discussions.
Now that an expression of interest has been received, a due diligence investigation and further negotiations will take place. The practitioners require that a binding offer be made so sufficient details of this can be included in the business rescue plan.
Comair, which operates the local British Airways franchise and budget airline kulula.com, has a debt of R3.4 billion and a fleet of 27 aircraft, of which 16 are owned, according to its annual report published last year.
Reuters – with additional reporting by Sizwe Dlamini - Business Report