SAA administrators hope to exit by month-end
The administrators of SAA hope to hand control of the business back to management by the end of the month, the state-owned airline said in a letter to affected parties seen by Reuters.
SAA has been under a form of bankruptcy protection since December 2019 and its fortunes worsened during the Covid-19 pandemic. All operations were mothballed in September 2020 when funds ran low.
The letter, dated March 18, said SAA’s board of directors and management were working on a plan to resume flights, without giving a date when that might happen.
The administrators said they had received R7.8bn out of a R10.5bn bailout allocated in the government’s October mid-term budget.
Out of that, around R360m has gone towards paying unpaid salaries, R1.5bn has been spent on severance packages and R400m has been transferred to creditors who lent money after the airline entered administration.
Other funds are earmarked for working capital when SAA restarts operations and to pay for passengers who have already paid for tickets but not yet flown.
Once further payments to creditors and employees have been made or provided for and a receivership set up, the administrators can relinquish control of the business.
The administrators said SAA’s debt had fallen by R35.7bn since they took over and its workforce had been cut from 4,700 to about 1,000.