FILE PHOTO: The logo of South African Airways (SAA) is seen on an aircraft at O.R. Tambo International Airport in Johannesburg, South Africa, February 14, 2019. REUTERS/Mike Hutchings/File Photo
FILE PHOTO: The logo of South African Airways (SAA) is seen on an aircraft at O.R. Tambo International Airport in Johannesburg, South Africa, February 14, 2019. REUTERS/Mike Hutchings/File Photo

WATCH: Unions ‘excluded’ from SAA rescue plans

By Siyabonga Mkwanazi Time of article published Dec 7, 2019

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Cape Town - Two unions have threatened to go to court to challenge the decision to appoint a business rescue practitioner at SAA without consulting them.

The National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) said yesterday they wanted the government to meet their conditions before accepting the business rescue process.

SAA named Les Matuson as the business rescue practitioner but Numsa and Sacca are up in arms over this.

WATCH:

Video by: Chelsea Lotz, Business Report TV

Numsa spokesperson Phakamile Hlubi-Majola said the government was directly interfering in the process and had already determined the process when it appointed Matuson.

She said they want former SAA group chief executive Vuyani Jarana to be appointed as an expert and work hand in hand with Matuson for them to accept this process.

“They must agree to have Vuyani Jarana, the former GCEO, recognised as an expert to work hand in hand with the business rescue practitioner they have appointed. If they do not accept that condition we will go to court and apply for an urgent interdict for the court to give us a directive stipulating that the business rescue application which Solidarity made continues because they have not withdrawn that application,” said Hlubi-Majola.

She said they would do everything in their power to save thousands of jobs at the airline.

SAA said earlier the business rescue practitioner would determine the number of jobs that would be cut.

The airline had earlier proposed to retrench 944 people, but the unions rejected this. This was during the time the unions went on strike over salaries.

Hlubi-Majola said the government was seeking to blame the unions for the financial crisis at SAA.

She said it appeared that the government was using the business rescue process to liquidate SAA.

She said Matuson is supposed to be independent but the government was interfering by determining the framework of the process.

The interests of the unions was to save jobs and the airline, she said.

Numsa and Sacca would support the application by Solidarity already in court.

Solidarity lodged the application to put SAA into business rescue a few weeks ago. The airline has been in financial trouble for many years.

Hlubi-Majola said SAA has not made a profit since 2011. It has suffered losses of R28billion in the last 13 years.

The National Treasury warned during the Medium-Term Budget Policy Statement that SAA, Eskom, Denel and other state-owned entities (SOEs) were posing a serious financial risk to the economy.

The government was sitting on guarantees of R570bn and if any of the SOEs fails to pay their loans this would cause a cross-default in all SOEs.

The government would not have the resources to settle this amount of money with the creditors across the globe.

SAA has been given R4bn during this process of business rescue and the R2bn comes from the National Treasury, the other R2bn would have to come from the lenders.

SAA would have to go to the market and raise the capital.

In a bid to deal with the bailouts of SOEs, Finance Minister Tito Mboweni had early this year proposed that a chief restructuring officer be appointed to an entity that has been given money.

The job of the chief restructuring officer would be to see if the entity concerned was using the money correctly. Some of the SOEs given bailouts were not using the money for the required needs.

Deputy Minister of Public Enterprises Phumulo Masualle said this week the decision to put SAA into business rescue was necessary to save the airline.

Political Bureau

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