Solvent SAA comes out of business rescue after 17 months

30 April 2021 - 16:49
By Reuters
SAA has exited business rescue. Stock photo.
Image: 123RF/RICHARD VAN DER SPUY SAA has exited business rescue. Stock photo.

SA’s struggling national airline SAA on Friday exited a local form of bankruptcy protection called business rescue after roughly 17 months.

SAA was placed under administration in December 2019, and its long-standing financial woes worsened during the Covid-19 pandemic. All operations were mothballed in September 2020.

Its administrators said in a statement that they had filed a notice of “substantial implementation” of a business rescue plan with SA’s Companies and Intellectual Property Commission.

That meant they had “effectively discharged the business rescue and handed over the operations of SAA back to its board and executive team”, adding SAA was now solvent.

The airline is one of a handful of SA state companies that depend on government bailouts, placing the budget under huge strain at a time of rapidly rising debt.

The department of public enterprises, the ministry responsible for SAA, said the government was in the final stages of negotiations with a preferred equity partner for SAA.

“A purchase and sale agreement should be concluded in the next few weeks. This will enable capital, and much-needed technical and commercial expertise, to be brought in to ensure a competitive flag carrier emerges,” said the department.

Neither the administrators nor the department said when SAA might resume flights.