Johannesburg - The public
enterprises ministry on Wednesday urged creditors to back a
restructuring plan for South African Airways (SAA), saying it
was the only way to rescue the loss-making airline.
Creditors are due to vote on the plan on Thursday, but one
of the creditors - private airline Airlink - is in court on
Wednesday trying to prevent the vote from happening.
State-owned SAA's administrators published the proposal last
week after repeated delays and months of wrangling.
The government has applied pressure on the administrators to
salvage SAA even though it has not made a profit since 2011 and
has relied on bailouts.
The Department of Public Enterprises (DPE) said in a
statement: "DPE believes the approval of the business rescue
plan would help creditors and employees to be co-creators of a
new airline."
The rescue plan proposes the government finds at least 10
billion rand ($577.6 million) in new funds to restructure SAA,
pay off some creditors and fund layoff costs. It also envisages
scaling back the airline's fleet while keeping most of its
domestic and international routes.
Trade unions have voiced their opposition because of the
thousands of job cuts the plan entails.
DPE sent a voluntary severance package offer to unions on
Tuesday in a letter seen by Reuters, saying the restructuring
could cost 3,620 jobs.
It said the offer, which includes one week of severance pay
per year of service, one month of paid notice and a potential
top-up payment, was final and agreement was important to avoid
liquidation.
It is not yet clear where funding for a restructured SAA
would come from.
The DPE said on Tuesday it had received unsolicited
proposals from private sector funders, private equity investors
and potential partners.
Finance Minister Tito Mboweni is scheduled to deliver an
emergency coronavirus budget later on Wednesday and could
announce more government funding for SAA.