Four of the country’s big banks, who are SAA’s secured lenders and concurrent creditors, will decide the future of the airline when they vote on the proposed business rescue plan. Photo: File
Four of the country’s big banks, who are SAA’s secured lenders and concurrent creditors, will decide the future of the airline when they vote on the proposed business rescue plan. Photo: File

SAA workers set to ground business rescue meeting

By Dineo Faku and Siphelele Dludla Time of article published Jun 21, 2020

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JOHANNESBURG - SAA workers have thrown a spanner in the works on the scheduled meeting of creditors to adopt the airline’s business rescue plan this week. 

The National Union of Metalworkers of South African (Numsa) and the South African Cabin Crew Association (Sacca) on Friday said they were planning to interdict Thursday’s meeting to vote on the business rescue voting. Numsa and Sacca rejected the proposed 3 700 job cuts to rescue SAA and accused Public Enterprises Minister Pravin Gordhan of engaging with them in bad faith. 

“We have accordingly lost all trust in the DPE and more particularly in Minister Gordhan, as an honest and competent partner in our endeavour to save SAA,” the unions said.

“We reject with contempt the announcement that only 1 000 employees will be retained in the business rescue practitioners’ plan as it is tantamount to unleashing a job loss bloodbath.” 

Four of the country’s big banks, who are SAA’s secured lenders and concurrent creditors, will decide the future of the airline when they vote on the proposed business rescue plan. 

The banks, the largest voting block collectively, hold government guaranteed claims totalling R16.4 billion for historic debt incurred by the airline. SAA joint business rescue practitioners Siviwe Dongwana and Leslie Matuson have projected that 1 000 employees would be retained . 

Dongwana and Matuson said and the remaining employees would be retrenched. “In terms of the envisaged ramp up, it is anticipated that the final staff number will increase in accordance with the market conditions and passenger demand to 2 892,” they said.

 “The employees who accept the voluntary severance packages or are retrenched are not precluded from applying for these positions as they become available.” The rescuers said they wanted the government to fund an initial working capital of no less than R2.8bn to rehabilitate the national carrier. 

They said that would cover R2bn in restarting costs, and that the working capital would be monitored based on operational requirements and R800 million to cover the costs of post-commencement of creditors. 

The R2.8bn cash injection is over and above the R16.4bn government ring-fenced in February for repaying creditors, R2bn to cover the cost of retrenchments and R600 million to pay general concurrent creditors. 

The rescuers said the outcome of the proposed restructuring was the commencement of a full domestic network starting January 2021 operated by the restructured national airline. 

The DPE has thrown its weight behind the proposed rescue plan.

BUSINESS REPORT 

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