SAA creditors to meet on Friday as funding deadline passes

An SAA creditors’ meeting has been called for 11am on Friday as funding for the embattled state-owned airline’s business rescue process did not materialise on Thursday, which was the deadline set by the business rescue practitioners (BRPs) last week.

Administrators said the meeting would discuss the funding issue and the proposed future of the company.

Last week the BRPs said government had undertaken to supply the rest of the necessary funding by Thursday. This did not happen, although government had already provided R9.3 billion in short-term funding to pay SAA’s creditors.

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It was initially estimated that the business rescue process would cost about R10.3 billion.

“The issue that the BRPs have to deal with at this point in time, concerns the existing funds which are available for operational expenditure, which are near depletion and thus the availability of the requisite funding to the company during the course of next week will determine whether the business rescue proceedings can continue,” the BRPs said.

“Accordingly the BRPs have found it prudent to advise affected persons of the company’s dire financial position.”

The BRPs said at the time that funding was one of two essential issues they were concluding – the other was the termination of aircraft leases.

Without these two issues being finalised, the business rescue plan could not be implemented, they said.

Meanwhile, about 3 146 of SAA’s 4 600 employees have applied for voluntary severance packages. These include more than half of management; over 600 pilots; two-thirds of cabin crew and almost the entire ground staff, the SABC reported.

According to the business rescue plan, 2 700 workers were earmarked for the voluntary packages at a cost of R2 billion. This means that not all the applications for packages will be approved.

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