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DPE Shines Light on SAA Business Rescue Plan

July 14, 2020

Department of Public Enterprises

The public enterprises department has called on creditors, unions and other stakeholders to vote in favour of a business rescue plan for South African Airways (SAA) tomorrow.

The SAA Business Rescue Practitioners (BRP) have scheduled a creditors’ meeting for Tuesday July 14, to vote on the business rescue plan.

A vote in favour of the plan by 75% of the voting interests would be required to carry the vote.

Should the business rescue plan not be supported, SAA would face liquidation.

Labour unions and staff representatives recently accepted voluntary severance packages for SAA employees.

In a statement, the department pointed out that the business rescue plan is the “only realistic pathway to restructure the airline and for a new national carrier to emerge from the business rescue process”.

The department confirmed that the business rescue plan has been revised.

“By approving the business rescue plan, creditors and employees will become the co-creators of a new national airline at a time when the devastating consequences of the COVID-19 are causing thousands of job losses in the global aviation industry.”

The department holds the view that approval of the business rescue plan would be the most “expeditious option for the national carrier to restructure its affairs, its business, debts and other liabilities”.

Meanwhile, in another statement, the department expressed concern at the “South African Airways Pilots Association’s (SAAPA) determination to squeeze the last resources out of SAA ahead of the crucial business rescue vote scheduled for tomorrow (14 July 2020)”.

“As the shareholder on behalf of the government, the DPE is disappointed that it has not dawned on the pilots that SAA is financially depleted, that the airline is in business rescue and fighting for its survival.”

According to the department, SAAPA plans to call for amendments to the rescue plan during tomorrow’s vote.

“Such insistence can cause further delays and a possible postponement to the vote, which will be to the detriment of the future of the airline.”

The department called on individual pilots to accept SAA’s Voluntary Severance Packages.