The business rescue practitioners (BRPs) of South African Airways (SAA) say they are making “every effort” to finalise outstanding matters at the airline by end of this month.
The practitioners said in a letter on Thursday that the main objective of the process was to transition SAA from being an insolvent company to a company that is both solvent and liquid.
The process also saw SAA’s employees being reduced from 4 700 to about 1 000 through voluntary severance packages and retrenchment.
“To this end, the liabilities of the airline have been reduced by R35.7 billion from R38 billion to R2.3 billion as a result of the compromise that has been negotiated by the BRPs with Concurrent Creditors and Lessors,” said the rescue practitioners.
According to the letter, the practitioners also managed to preserve critical memberships of the airline important for its commercial success.
Before filing a notice of substantial implementation, the BRPs must ensure payment to employees who have not yet been paid or ensure a provision is made for such payment.
The department of public enterprises (DPE) announced last year it would pay three months outstanding salaries for June, July and August to SAA employees, who had not been paid for nearly a year as the airline has been in business rescue since December 2019.
They must also elect “receivers” of the remaining issues and ensure payment of post-commencement creditors.
“The aforesaid attendances are being dealt with as critical by the BRPs and are being addressed as expeditiously as possible and is it anticipated that these items will be fully addressed by the end of March.
“The BRPs are making every effort to finalise the outstanding items by the end of March such that a notice of substantial implementation with the CIPC (Companies and Intellectual Property Commission) can be filed,” reads the letter.
The DPE has paid out R1.3 billion to SAA to settle its severance packages with employees, as well as back paid owed.
The tranche forms part of the R10.5 billion bailout Finance Minister Tito Mboweni announced in October and was paid out last week.
A total R2.8 billion was also given to SAA’s BRPs in December 2019, according to SAA spokeswoman Louise Brugman.
Brugman told The Citizen that the funding would be used to pay voluntary severance packages, which have been accepted and signed, and will also be used for employees who accepted the three months’ back pay deal and post commencement creditors.
Compiled by Vhahangwele Nemakonde. Additional reporting from Ina Opperman.