CAPE TOWN - The business rescue practitioners of South African Airways on Friday convened the first meeting of the failing airline's creditors and concluded that there was a reasonable prospect of conducting a successful business rescue.
The aim of the meeting set up by business rescuers Les Matuson and Siviwe Dongwana, was also to set up creditors' committee and to receive valid claims from creditors.
Matuson said: “Our primary objective of the business rescue process is to either rescue SAA through restructuring its affairs, business, property, debt and other liabilities and equity that maximizes the likelihood of the company continuing on a solvent basis or develop a plan that results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of SAA”.
He noted that the vast majority of business rescue proceedings in South Africa have pursued the second option.
"The joint business rescue practitioners are of the opinion that there is a reasonable prospect of a successful Business Rescue notwithstanding the inevitable risks and challenges."
He added that they were of the belief that the business rescue practice will "achieve a better outcome for all stakeholders than an immediate liquidation".
One of the reasons is that SAA leased most of its aircraft, and therefore had limited assets to sell or distribute to creditors.
"The preliminary view is that after the allocation of the distributable proceeds to preferent creditors (comprising post-commencement financiers, preferent claims of employees, post-commencement unpaid lease payments) no funds will be available for distribution to concurrent creditors.
"The contingent and damages claims will crystalise on a liquidation which will increase the quantum of the concurrent claims which reinforces the preliminary view that the estimated dividend for concurrent creditors is zero cents in the rand."
Matuson and Dongwana said they had asked that the deadline of 13 January for publishing a business rescue plan be extended to give them time to communicate their preferred scenario to all stakeholders.
"At the meeting, Matuson requested that the BRPs be given until the latest 28 February 2020 to publish the plan but that they would endeavour to publish as soon as they had a best possible business rescue plan for the business."
The business rescue team was appointed two weeks ago after a wage strike compounded SAA's losses. The airline had suffered losses of some R28 billion in the past 13 years.