Aviation expert company to chart new path for airline replacing SAA — Gordhan
The job of the business rescue practitioners at SAA was to make the best possible effort to ensure there was a viable business at the end of the process, public enterprises minister Pravin Gordhan said on Friday.
He said the practitioners, appointed on December 5, were not put there to run an airline but rather to emerge with a plan so that competent managers were appointed to run the national carrier.
Gordhan was briefing parliament's standing committee on public accounts and the portfolio committee on public enterprises on the situation at SAA.
He said the reason government provided R5.5bn to the business rescue practitioners was for them to complete a business rescue process that ended with a viable streamlined, trimmed down, cost-effective business.
He said the Companies Act gives practitioners 25 days to devise a business rescue plan.
“The act says 25 days. It is 25 days versus 162 days [that the practitioners had been at SAA]. How do we justify taking R5.5bn and spreading it over 162 days and not having a credible business plan for a viable business to emerge?” asked Gordhan.
Five months after their appointment, the business rescue practitioners presented a draft rescue plan on May 5, which government found to be deficient. The draft plan called for the winding down of SAA.
Gordhan said the two business rescue practitioners shared a total of R30m between them for a period of four months as their fee.
One of the practitioners, Siviwe Dongwana, told the committee that the total spend of SAA from December 5 to the end of April was R9.9bn.
Gordhan said government had since employed the services of an aviation expert company to chart a way for a new airline to replace SAA.
“It is in this regard that we have, over the last six weeks or so, employed the services of an aviation expert company to say, in a post-Covid environment, what could an airline look like and what other constraints would it face and how do we start a new airline,” Gordhan said.
He said labour union representatives at SAA had participated in one or two technical workshops in designing a future airline and making a contribution.
Gordhan said the business rescue process needed to have been concluded a long time ago.
“What we require as an outcome of this process is a viable airline, retaining as many workers as we could and retaining as many jobs as we could, which is quite important in the current economic context and making the airline non-reliant on the fiscus,” he added.
Gordhan said government did not consider winding down SAA to be an alternative to the actual objective that business rescue provisions of the Companies Act desired.
Dongwana said the practitioners had anticipated having a plan in place at the end of February.
However, the practitioners on March 26 requested a postponement to the end of May to present the plan because of uncertainty brought about by the lockdown.
Dongwana said they would pursue a winding down option. The rationale was that winding down would yield a better return to the shareholder and creditors than if SAA were liquidated.