JOHANNESBURG – The South Gauteng High Court will tomorrow hear an urgent application by SA Airlink to interdict a creditors’ meeting to vote on the proposed business rescue plan for South African Airways (SAA).
SA Airlink yesterday filed an urgent court application seeking to interdict SAA’s business rescue practitioners from convening a meeting of creditors to consider the State-owned airline’s proposed rescue plan.
The privately owned regional and commuter airline said it wanted the business rescue process terminated and the appointment of rescuers set aside.
It said SAA should be placed in provisional liquidation.
SAA rescuers Les Matuson and Siviwe Dongwana have scheduled a meeting on Thursday for creditors to vote on the proposed business rescue plan.
The plan projected, among other things, that only 1 000 employees would be retained and no less than R2.8 billion immediate cash injection would be required to rehabilitate the national carrier.
SA Airlink said the plan prejudiced SAA concurrent creditors. It said SAA’s secured lenders will then own an unencumbered business, funded by concurrent creditors, but still commercially insolvent.
“The plan is commercially implausible, especially given the uncertain outlook for the industry after the Covid-19 crisis,” SA Airlink said.
“It also fails to meet the government’s stated objective of establishing an airline that would be sustainably viable and independent of the fiscus. The plan requires taxpayers to prop up the company for several years post rescue. The plan is still conditional, SAA remains commercially insolvent on the business rescue practitioners’ own version, and there is no indication as to how the plan and the expected losses will be funded.”
SA Airlink is an SAA code-share and franchise business partner, and has been observing developments since the national carrier was placed in business rescue in December.
It said all SAA creditors deserved a fair deal based upon a reasonable settlement. SA Airlink joins the National Union of Metalworkers of South Africa and the South African Airways Cabin Crew Association who have also threatened to interdict the same creditor’s meeting.
But the government, through the Department of Public Enterprises (DPE), said it would approach the court seeking to intervene with the intention to oppose both applications.
“As we approach the final week to either endorse or reject the business rescue plan by the BRPs, it is disturbing that a competitor of SAA, which is 100 percent privately owned, as well as two labour unions, who should be acting in the best interest of their members, are seeking to destroy SAA by forcing a liquidation through the courts,” the DPE said in a statement.