SAA suspends all regional and international flights due to coronavirus

SAA resumes flights to Mauritius next month. Image via: flickr (Paul Scott)

‘Rescue practitioners ensure trade of SAA at expense of the poor,’ says DA

This comes after SAA business rescue practitioners (BRPs) were handed another extension to deliver their rescue plan.

SAA suspends all regional and international flights due to coronavirus

SAA resumes flights to Mauritius next month. Image via: flickr (Paul Scott)

On Thursday 27 February, Business Rescue Practitioners (BRPs) Les Matuson and Siviwe Dongwana, were given another extension to finalise their rescue plan for South African Airways (SAA). 

This means they will have had three months in order to complete it, which, according to the Democratic Alliance (DA), is considerably more than the period stipulated in the Companies Act.

SAA creditors and lenders allowed for an extension until 31 March 2020. 

SAA business rescue process a ‘farce’

The DA is convinced that the lack of any urgency on the part of creditors and lenders to get the business rescue plan underway, is a clear indication that they feel assured that they will get their money — in other words, they are ready to be showered in bailouts. 

“They know that the ANC will simply be draining billions of rand from millions of poor South Africans who get no benefit from the SAA vanity project. The bailouts will undoubtedly be more than the R16.4 billion announced by Tito Mboweni in his budget speech,” said DA member of the Standing Committee on Public Accounts, Alf Lees. 

“Les Matuson and Siviwe Dongwana are under no pressure to do the correct thing to stop the wasteful expenditure of billions of hard-earned taxpayer money on SAA bailouts by applying to court for SAA to be liquidated. Instead, they have become complicit in ensuring that SAA continues to trade at the expense of the poor and the hungry,” he added. 

Lack of urgency due to bailouts 

The DA argued that their relaxed approach, along with extension requests is a product of the R5.5 billion commercial lender and Development Bank of Southern Africa loans provided to SAA since the start of the ‘business rescue’ process on the 5 December 2019. 

Lest we forget the R16.4 billion bailout announced by Finance Minister Tito Mboweni during his budget speech. 

Lees said creditors are aware that Minister of Public Enterprises Pravin Gordhan will not allow SAA to be dissolved and based on that, they know their payments are a sure thing. 

Matuson and Dongwane advertised for creditors to vote for or against a proposed request for another extension for the publication of a business rescue plan that is required in terms of section 150(5) of the Companies Act, No 71 of 2008. They were indeed successful in their request. 

The DA explained that had there not been countless bailouts to keep SAA going, the creditors would be insisting on a rescue business plan and BRPs would be hustling to get it done.