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SAA to take business rescue route to avoid “a disorderly implosion of the airline”

Details

saa thumb medium95 76BL Premium reports that the government announced on Wednesday that South African Airways (SAA) was to be placed in business rescue.  

The move came after a week of speculation on the airline’s future, which is massively loss-making.  Two weeks ago, trade union Solidarity filed court papers requesting, as an interested party, that the airline be placed in business rescue.  Public enterprises minister Pravin Gordhan said that business rescue was the best way of avoiding a disorderly implosion of the airline.  Business rescue, under the Companies Act, is an attempt to rehabilitate companies that are financially distressed by restructuring their affairs.  The objective is to enable the company to continue operating while being restructured, saving some jobs in the process.  Gordhan indicated as follows:  “As soon as the decisions are made, a business rescue practitioner will be put in place and from that point on the business rescue practitioner will run the airline and will consider the steps that need to be taken so that the end result of the restructuring process is a viable, financially stable and operational entity.”  He said SAA had, on that basis, secured the necessary funding to enable it to continue trading.  These were to be announced in due course.  Business rescue is certain to result in a radical restructuring of the SAA business and possibly of its subsidiaries.  SAA has been without a CEO since June.  It had also been attempting to attract a new chief restructuring officer, following the premature departure of the previous incumbent.

  • Read the full original of the report in the above regard by Carol Paton at BusinessLive (paywall access only)
  • Read too, SAA board unanimously backs business rescue, at BusinessLive


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