Govt calls on creditors, other stakeholders to vote for SAA’s rescue plan
In a statement on Wednesday, the Department of Public Enterprises said that backing the plan by the BRPs would result in a better return for all parties compared to liquidation.
JOHANNESBURG - Government is urging creditors and others involved at South African Airways (SAA) to vote in favour of the controversial business rescue plan for the broke carrier.
In a statement on Wednesday, the Department of Public Enterprises (DPE) said that backing the plan by the business rescue practitioners (BRPs) would result in a better return for all parties compared to liquidation.
“The DPE believes a positive vote to finalise the business rescue process would be 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, competitive airline that provides integrated domestic, regional and
international flight services. Should creditors vote not to support the business rescue plan, SAA would face liquidation,” said DPE spokesperson Sam Mkokeli.
“As the shareholder on behalf of government, the DPE and has highlighted the disadvantages of the liquidation of the airline: creditors would receive substantially less for debts owed to them by SAA, there would be a loss of opportunities to provide the new airline with technical, financial, and operational expertise and overall future business partnerships and the severance benefits to retrenched employees would be capped across the board, regardless of years of service,” he added.
In order for Thursday’s vote to pass, 75% is required and this would pave the way for SAA’s BRPs to finalise their restructuring plan for the embattled airline.
Government was told it would need to find at least R10 billion for the rescue plan to work.