South African Airways (SAA) Business Rescue Practitioners say they have no further funds for rescue efforts and that the airline cannot survive beyond the end of April.
In a notice to affected parties, the practitioners say they do not have sufficient funds available to continue honouring the obligations of SAA to its employees beyond April 30.
The practitioners have now considered the only two options available to them:
Firstly, given the fact that the practitioners have no further funding, the practitioners have considered whether they can develop a business rescue plan which secures a better return for SAA’s creditors than would result from its immediate liquidation. This entails a wind down process which would envisage the termination of the employment of employees by agreement (with severance packages being agreed), a sales process being undertaken which will ultimately result in a distribution of such proceeds to affected parties who are entitled thereto in terms of the business rescue waterfall . If an agreement can be reached with the employees, a business rescue plan can be developed and published.
Secondly, if the practitioners cannot reach an agreement with employees, then the practitioners are unable to continue with the business recue process and the practitioners will have to make an urgent application for an order discontinuing the business rescue proceedings and placing SAA into liquidation.
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The wind-down process is dependent on employees accepting the termination of their employment by mutual consent within a given time frame.
Government met with some of the unions representing employees at SAA on Tuesday. It was made clear at the meeting that the airline can no longer depend on financial support from government after it turned down another R10 billion bailout.
On Wednesday, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) said the Department of Public Enterprise have taken a one-sided approach in regards to the future of South African Airways (SAA).
Labour Minister, Thulas Nxesi and Tourism Minister, Mmamoloko Kubayi-Ngubane also attended the meeting.
The unions said they were only able to discuss the possible framework for negotiations and a draft agreement is yet to be signed.
The unions said the statement released by government this week does not take a holistic view of the situation discussed.
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INFOGRAPHIC: SAA’s woes:
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