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SAA creditors to take crucial vote over business rescue plan

The broke airline went into business rescue in December last year following years of losses and state bailouts.

Picture: 123rf.

JOHANNESBURG - A crucial vote by South African Airways (SAA) creditors on a proposed business rescue plan is expected to take place on Tuesday.

The broke airline went into business rescue in December last year following years of losses and state bailouts.

A vote of 75% is required to accept a business rescue plan. This is the second attempt to get the plan accepted.

The Public Enterprises Department has urged unions and creditors to vote in favour of the plan, which is said to cost R10 billion.

But the DA’s Ghaleb Cachalia has called on creditors not to vote in favour of the plan.

“The fact of the matter is that the DA knows that SAA is bankrupt. The bank and other big creditors have lent money to this entity guaranteed by the state are looking to participate in the vote.”

The Public Enterprises Department said that it was concerned as pilots are continuing to refuse severance packages, just as the future of the airline is being decided.

The SA Pilots' Association is not backing down on its demand to be included in the business rescue plan for the cash-strapped airline.

The association also wants to secure severance packages of up to 60% more than what's being offered.

Other unions have already accepted the offer, which would result in about 2,700 employees being retrenched.

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