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AVERTING LIQUIDATION: Creditors approve SAA’s business rescue plan as the airline gets a new interim boss

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About 86% of creditors have voted in favour of the SAA business rescue plan, meaning that the airline will, for now, avoid liquidation. Meanwhile, Philip Saunders is the new SAA interim CEO. He becomes the fourth SAA CEO in five years.

A majority of SAA creditors have voted in favour of implementing a plan to restructure the troubled airline and momentarily saving it from the worst-case scenario of liquidation.

At the same meeting, acting director-general for the Department of Public Enterprises, Kgathatso Tlhakudi, confirmed the appointment of Philip Saunders as the SAA interim CEO. The department is the sole shareholder of SAA. A restructured SAA will still depend on public finances, as a total of R26.7-billion – of which R10.3-billion is new money – will be required to settle the airline’s debt, to fund the restart of its operations, and pay retrenchment packages to workers and creditors, whose debt is not guaranteed by the government, including aircraft lessors.

This will likely pit Treasury officials and Finance Minister Tito Mboweni against Public Enterprises Minister Pravin Gordhan, who wants SAA to be rescued at all costs.

 

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