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Comair liquidation likely to leave lenders and owners short

Business rescue practitioners, Richard Ferguson and Neil Hablutzel, yesterday pulled the plug on any further attempts to rescue the stricken airline, and said it should be liquidated. Image, Supplied.

Business rescue practitioners, Richard Ferguson and Neil Hablutzel, yesterday pulled the plug on any further attempts to rescue the stricken airline, and said it should be liquidated. Image, Supplied.

Published Jun 10, 2022

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COMAIR shareholders will struggle to receive any return on their shares based on earlier scenarios of the airline’s liquidation.

Its business rescue practitioners (BRPs), Richard Ferguson and Neil Hablutzel, yesterday pulled the plug on any further attempts to rescue the stricken airline, and said it should be liquidated.

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Comair's new owners since it was delisted from the JSE on April 6, 2021 at R4.19 per share are former directors Martin Moritz, Pieter van Hoven and Rodney Sacks, and an investment vehicle, Luthier Capital. The airline had been listed on the JSE since 1998. It suspended flights in March this year.

The owners had been trying to raise about R100 million to make up for loss of revenue due to travel bans to South Africa in the wake of the Omicron Covid-19 variant’s effects, and due to the impact of rising fuel prices on the airline. The BRPs said yesterday the additional funding could not be raised.

Earlier in the business rescue process, the BRPs said they would pay all shareholders 4.26 cents per share, after the business rescue plan was implemented. In liquidations, creditors are usually paid first with liquidation proceeds, with shareholders usually last in the line to receive a return.

When Comair was delisted, it was operating some 17 aircraft, had started using Lanseria Airport again and it had also started flights to Harare and the Victoria Falls. Last year it sold its Slow Lounge operation to FirstRand for a R250m facility.

The BRPs drew up a scenario plan for Comair’s liquidation in 2020, and the value of its assets at that time was about R7.47 billion, with some R7.2bn of that comprising aircraft and related equipment, excluding depreciation.

However, the estimated shortfall from the sale of assets at that time amounted to R5.11bn.

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Its biggest secured creditors in 2020 were Nedbank, which was owed R1.34bn. Citibank was owed R583m, Absa was owed R331m, Investec some R556m, while the SA Revenue Service was owed R383m. Total claims against the company at that time came to R7.78bn.

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