Former Comair executives to buy out firm in restructuring
Johannesburg - Former board members and executives of Comair Ltd will buy out the airline in a restructuring process, the company said on Friday, clearing the way for the private carrier to take off again by December.
Creditors and shareholders of the airline, which had been under a form of bankruptcy protection, were to approve a restructuring plan of the company by Friday.
"The vast majority of creditors and shareholders voted to adopt the business rescue plan," the company said, adding that former Comair board members and executives will invest fresh equity of R500 million ($30.76 million) in return for a 99% shareholding.
The struggling airline, which operates the British Airways franchise in South Africa and budget airline Kulula.com, was forced to halt all activities in March after a countrywide lockdown was imposed to curb the spread of coronavirus. It cut away Comair's cashflows and forced it into a form of bankruptcy protection in May.
The administrators of the restructuring process presented a plan earlier in September which said they had identified investors who would inject fresh equity into the company.
The approved rescue plan also entails 600 million rand in fresh loans from its lenders, a deferred payment of 800 million rand and delisting from the Johannesburg Stock Exchange (JSE), the company said.
Glenn Orsmond, a former joint chief executive and representing the group infusing equity capital, said in the statement Comair plans to start operations by December under both the British Airways and Kulula brands.
Should everything go according to plan the business rescue process should be concluded by Mar. 31, the company said.
"There may still be a few bumps on the way ahead, however, now that the plan is adopted, at last clearer skies are now in sight," Wrenelle Stander, Comair's chief executive said.