JOHANNESBURG - The liquidators of underperforming SA Express have warned that they may not be able to save the regional airline, the practical option would be to sell it.
Provisional liquidator Aviwe Ndyamara told Parliament yesterday the liquidation had cost more than what they had anticipated, charging that the current funds might not be enough to wind up the process and pay severance packages to almost 1000 employees affected by the restructuring.
Ndyamara said the liquidators had not been paid since their appointment in May and have had to pay R300000 from their own pockets to comply with their statutory duties.
He said even employees of the SAA subsidiary might not be paid, as the priority was preferential creditors, concurrent creditors and secured creditors.
“We are the last to get paid as liquidators,” Ndyamara said. “It’s a totally different legislative process from the business rescue process. It will take maybe 18 to 24 months, but we will only get paid once we have completed the winding up of the airline, draft the liquidation and distribution account,” he said.
Ndyamara said the remuneration of employees would be dealt with as claims against the company payable from the free residue of a liquidation and distribution account.
“The employees enjoy a special preference in terms of the insolvency law, but are only paid after the secured creditors’ claims have been settled,” Ndyamara said.
“At this stage, it is unclear if there will be residue for payment of employee claims.
“The implication of the provisional order granted is that employees’ employment contracts were, by law, immediately suspended.”
SA Express employees have not received salaries since March and have had to rely on the Unemployment Insurance Fund Temporary Employee/Employer Relief Scheme (Ters).
Last week, the South Gauteng High Court extended the status of the final liquidation order of SA Express to September 6.
Ndyamara said the Ters benefits for April and May had been processed and received by the employees, while the UI19 forms, salary schedules, section 38 letters and claim forms had been completed.
He said the liquidators had to conclude the sale of the airline, as it cost them money every month.
“The extension of the liquidation process is giving us an opportunity to engage in a sales process, pending the termination of the licences,” Ndyamara said.
“The licence expires at the end of July, and we have one particular licence that is scheduled to expire at the end of December.”
Ndyamara said only creditors with proven claims would benefit from the distribution of the debt.
“Each creditor in the liquidation process will have to file a claim and an affidavit to prove that they are indeed owed an X amount against the company,” he said.
“There is a ranking of creditors’ claims. Creditors’ claims are ranked and paid according to preference determined by the Insolvency Act.”