Picture: Siphiwe Sibeko/Reuters/African News Agency (ANA) Archives
Picture: Siphiwe Sibeko/Reuters/African News Agency (ANA) Archives

Public enterprises still working with other departments to address SA Express problems

By ANA Reporter Time of article published Jul 11, 2020

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Pretoria - The public enterprises department (DPE) has dismissed media reports that government has declined to assist with retrenchment packages for regional airline South African Express (SAX).

As South African Express has been placed under provisional liquidation, its future will be determined by the liquidation process, the department said in a statement.

The DPE was continuing to seek support of other agencies of government to address the immediate needs of SAX employees. At the same time, the provisional liquidators were assessing proposals from several potential strategic equity partners for the airline, which would determine its long-term future.

Government, as the sole shareholder through the DPE, remained sympathetic and deeply mindful of the plight of SAX employees who had not received salaries for several months, the department said.

For the record, the DPE believed it was important to put into perspective the history of SAX's financial woes.

Due to the continued deterioration in the airline’s financial position a creditor successfully applied to court for SAX to be placed under business rescue, and this was subsequently done on February 6, 2020.

Government had provided R1.5 billon to SAX during the 2018/19 financial year to address its solvency and liquidity problems. However, the airline continued to face operational decline.

The DPE had several meetings with the business rescue practitioners (BRPs) to find the best restructuring solution for SAX without a positive outcome. The BRPs failed to develop and submit a viable business rescue plan.

The dire financial situation of the airline was then exacerbated by the negative impact of the coronavirus (Covid-19) pandemic, which had immensely affected airlines globally, and SAX was placed under provisional liquidation, the DPE said.

"On Thursday,  9 July 2020, some media outlets carried a copy of a letter from the acting director general of the DPE to one of SA Express employees’ representatives, where a call for post-commencement funding (PCF) for SA Express was responded to, indicating this demand cannot be met due to reasons covered above.

"The response was misconstrued to say that the request by employees that government assists with retrenchment packages to ensure an elegant exit from SA Express has been denied. This is not true, the request is still being processed within government. The DPE requests that the predicament of the SA Express employees be covered responsibly and that facts be checked with the department if there are any misunderstandings."

African News Agency/ANA

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