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Govt now tasked with providing R10bn funding for new SAA airline

This comes after 86% of creditors earlier on Tuesday voted to adopt SAA's business rescue plan.

Picture: @flysaa_care/Twitter

JOHANNESBURG - SAA business rescue practitioners have clarified that they need R10 billion to fund the new airline. Earlier it was reported that R16 billion was needed with deadlines given.

SAA creditors have approved the embattled airline’s business rescue plan, with a protracted process of almost 7 months to approve the deal.

Government now has to find the money to fund the new airline and needs to commit at least R10 billion that will be required to pay for start-up operations and pay laid-off workers’ severance packages.

This comes after 86% of creditors earlier on Tuesday voted to adopt SAA's business rescue plan.

The law is clear that for the plan to be implemented, money must be obtained.

Government said it was working on this and was confident of finding a strategic equity partner in raising the needed funds.

Government now has the mammoth task of providing proof of funding or a letter confirming receipt of funds by the next deadline, 15 July.

With the adoption of the rescue plan, SAA avoids possible liquidation, which would mean selling off its assets.

Despite Finance Minister Tito Mboweni not giving SAA money in June during his supplementary budget, acting director general of public enterprises Kgathatso Tlhakudi was confident the money would be secured.

“The priorities for the department are now to funding commitments by the government for the business rescue plan and also appoint a new and reconfigured interim board for SAA.”

The new airline will be headed by Phillip Saunders as interim CEO and an interim board will be announced soon.

Meanwhile, the National Union of Metalworkers of South Africa Numsa and South African Cabin Crew Association said they rejected the appointment of Saunders.

This, despite the unions saying they were relieved the protracted business rescue process had come to an end after creditors voted to approve it.

Numsa’s Phakamile Hlubi-Majola said the new airline deserved a fresh team at the helm.

“We have noted that Phillip Saunders has been appointed as interim CEO of the airline. Phillip Saunders is currently the chief commercial officer at SAA and therefore a member of the current executive management of the airline. He is part of the very same disastrous management team, which brought the airline to the brink of collapse.”

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