South African Airways dodges a bullet
Photo: Ray Barber / Flickr

DPE to block application condemning SAA to provisional liquidation

SA Airlink, who are owned in excess of R500 million by SAA, will try and block creditors from voting on BRPs rescue strategy this week.


South African Airways dodges a bullet
Photo: Ray Barber / Flickr

The Department of Public Enterprises (DPE) said on Monday 22 June that they will block any attempt by regional airline SA Airline to provisionally liquidate embattled South African Airways (SAA).

SA Airlink indicated that they would file a court interdict preventing Business Rescue Practitioners (BRPs) from holding a meeting with SAA’s creditors this week. 

The proposed meeting aims to provide the platform for a vote on the BRPs strategy to rescue the airline from complete financial collapse. 

SAA liquidation application opposed by DPE 

SA Airlink is currently owned in excess of R500 million from SAA, with the regional airline serving as one of SAA’s primary trade creditors. 

They are set to receive only a fraction of that amount should creditors vote in favour of the plan devised by BRPs, who have said that they have no faith in the prospect of salvaging SAA. 

The DPE said in a statement on Monday that they would approach to the courts to prevent SA Airlink from intervening in the BRPs attempt to action a vote on their plans. 

“The BRPs have scheduled a creditors meeting for 25 June 2020 to vote on the business rescue plan. Should NUMSA and SACCA launch an application to stop the creditors meeting, DPE will oppose the application,” the department said.

“As we approach the final week to either endorse or reject the business rescue plan by the BRPs, it is disturbing that a competitor of SAA, which is 100% privately owned, as well as two labour unions, who should be acting in the best interest of their members, are seeking to destroy SAA by forcing a liquidation through the courts.”

They added that they are concerned that the proposed interdict is not in the interest of the 3 000 workers facing retrenchment. 

“The question is why? Is this really in the interest of SAA workers or the fiscus?”

Interdict ‘not in the interest of stakeholders’ 

The department, who are not listed as respondents in the SA Airlink application, said that they felt their interjection was necessary in the interests of the company’s shareholders.  

“As the shareholder representative, the DPE will approach the courts seeking to intervene with the intention to oppose the application by SA Airlink.”

The added that the National Union of Metalworkers of SA (Numsa) and the SAA Cabin Crew Association (SAACCA) also plan to try and block the creditor vote. 

“The department is also aware of plans by the National Union of Metalworkers of SA (Numsa) and the SAA Cabin Crew Association (SAACCA) to interdict the creditors’ meeting through the courts.”

“The government is committed to supporting a competitive, viable and sustainable national airline and wishes to engage constructively towards the national interest objective of such an airline in a constrained fiscal environment, taking into account the impact of COVID-19 pandemic on this situation.”