Business rescue practitioners have suspended SAA operations until funding is procured. Photo: SAA
Business rescue practitioners have suspended SAA operations until funding is procured. Photo: SAA
Business Rescue Practitioners (BRPs) handling the effort to procure funding that will enable the implementation of embattled South African Airways’ (SAA’s) business rescue plan, and the Democratic Alliance (DA) aren’t happy about it.
BRPs said that they need to shut down operations so as to place the airline under care and maintenance until funding discussions are completed. The DA however, believe that the decision is simply a stalling tactic to give the African National Congress (ANC) more time to secure taxpayer money to bail out the defunct airline.
SAA ordered to suspend operations
In a statement released on Tuesday 29 September, the BRPs said that they are making solid progress in terms of securing funds that will allow for the emergence of a new airline from the currently bankrupt SAA.
“The BRPs and government have engaged with certain funders that have indicated a willingness to provide a portion of the funding required for the implementation of the business rescue plan,” they said.
“The BRPs are engaging with government in relation to the securing of the remaining funding that is required to fully implement the business rescue plan and what the implications would be for the company if it receives a portion of the required funding.”
This follows government and the Department of Public Enterprises’ (DPE’s ) announcement that they are committed to SAA’s restructuring process. The airline is seeking R10.5 billion in funding.
DA charge that suspension is a ‘delay tactic’
But Alf Lees, the DA’s Member of the Standing Committee on Public Accounts, said that the decision to suspend operations “once again demonstrates that the entire rescue process was a politically driven sham”.
“With no private investors in sight there should be only one option for SAA at this point – liquidation,” he said.
“It is unconscionable that the ANC government, during this time of economic upheaval and joblessness, would even consider allocating desperately needed tax revenue funding for a vanity project.”
‘Banks must reject SAA bailout appeals’ – DA
He urged banks and creditors to reject any appeal from the Ministers of Public Enterprises, Pravin Gordhan, and Finance Minister Tito Mboweni, for additional government guaranteed loans.
“It would be morally indefensible for banks to grant billions of Rands in additional loans to SAA. We understand that the banks have offered some funding in order to meet the voluntary severance packages for employees on condition that SAA is shut down,” he said.
“We hope that the banks will do the right and ethical thing and will not capitulate to pressure from Minister Gordhan and make the full R10.4 billion available to SAA.”
“The banks now clearly hold the future of SAA in their hands and must not let ordinary South Africans down by providing a financial lifeline to SAA.”
