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Revised Business Rescue Plan for SAA Drawn Up

July 9, 2020

Department of Public Enterprises

The public enterprises department has welcomed the publication of a revised Business Rescue Plan for South African Airways (SAA).

In a statement, the department also urged creditors, employees and stakeholders to vote in favour of the plan next Tuesday.

“As the shareholder on behalf of government, the DPE believes the plan is the most expeditious option for the national carrier to restructure its affairs, its business, debts and other liabilities, resulting in the emergence of a new viable, sustainable and competitive airline that provides
integrated domestic, regional and international flight services.”

The Business Rescue Practitioners (BRPs) have scheduled a creditors meeting for Tuesday, 14 July 2020 to vote on the business rescue plan.

The business rescue plan will be adopted if 75% of the voting interests vote in favour.

The department “supports the plan that allows for a conservative start of a new airline so that it can recapture the market, revamp the board and management and fill executive positions with qualified and fit-for-purpose leadership. This will also help prepare for the launch of the long term operational strategy, as well as build a company that will reabsorb a significant amount of qualifying people during the interim flying period”.

Meanwhile, in another statement, the department was encouraged that labour unions, and representatives of non-unionised managers and ground staff, have agreed to accept the SAA voluntary severance packages (VSPs) which will be supported by a social plan and skills development programme for employees who will be retrenched.

As part of the agreement, 1 000 SAA employees will be retained.

“Around 2 700 SAA employees will be retrenched and will be able access the VSPs as soon as a business rescue plan for SAA is endorsed by a creditors vote.”