that the two parties had agreed to suspend the termination of jobs and the sale of assets as part of the winding-down process, and that the parties would get together in three forums to discuss finances, assets and labour.Gordhan’s spokesperson, Sam Mkokeli, said the department was developing an airline business model that will be profitable and commercially sustainable. “The department continues to engage with labour on a weekly basis to identify solutions to the immediate challenges facing the airline. Work is under way to finalise a business plan, which will take into account the views of different stakeholders who have an interest in the sustainability of the airline,” he said.
“A sustainable airline model will require assets to operate, and once the operating model has been finalised, the department will identify the assets required to complement the business model,” he added. TheM&Ghas also seen the draft business-rescue plan, based on a wind-down process, that Matuson and Dongwana want to publish on May 29. The 78-page document, the
M&Gunderstands, was given to Scopa after last Friday’s meeting and provides a glimpse into the process the rescue practitioners hope to follow to finalise SAA’s winding down.This includes the termination of employment of all SAA employees and the sale of assets, which the rescue practitioners identified as:
Pockets of land in Johannesburg, Durban, Bloemfontein, Kimberley, East London, Port Elizabeth, George, and Cape Town;Saleable landing slots; Five Airbus A340-300, and four Airbus A340-600 aircraft;Divisions SAA Voyager, SAA Lounges, and SAA Cargo;
Shares in subsidiaries SAA Technical and Air Chefs; andSAA’s trademark and brand. “In an attempt to realise the best possible value for the company’s assets, the BRPs will initiate an accelerated sales process in regard to the disposal of the company’s assets. The BRPs will determine which assets are better suited to a sale by open tender of auction,” the document said.
When the assets are sold SAA as a company will cease to operate, and the business-rescue practitioners will then deduct their fee, pay severance packages to employees and attend to SAA’s other creditors.Another section of the document reveals that SAA’s government-guaranteed debt, which stood at R9.2-billion before business rescue and will be repaid between July 2020 and the end of the 2023 financial year, is owed to Nedbank (R2.7-billion), Investec (R1.2-billion), Firstrand (R835-million), Absa (R2.28-billion), Standard Bank (R1.2-billion), IAM (R253-million), Ashburton (R113-million), Momentum (R105-million) and Sanlam (R168-million).
Nedbank, Investec, Firstrand, Absa, and Standard Bank were owed another R2-billion in business-rescue post-commencement funding, while the Development Bank of Southern Africa is owed R3.5-billion. Matuson and Dongwana last week told Scopa that they had a business-rescue plan ready as far back as April, and that this was thwarted by the government’s refusal to grant about R7-billion to restructure the business.
Gordhan and his department in return accused the rescue practitioners — who were given R5.5-billion in post-commencement funding to restructure the company — of failing to take simple actions to save the airline. These actions include the returning of several leased aircraft, which could have freed up R100-million that could have paid for salaries in May and June, and reviewing onerous contracts.
Instead, they argued, the rescue practitioners continued to operate SAA as a business and that this led to all the money being squandered. The government was willing to extend money for SAA, but only if it was satisfied there was a viable plan in place.
The department of public enterprises document expresses a view that the government is disappointed in the rescue plan that was shared with it by the rescue practitioners, saying they “were out of their depth”. “They did not hire the best assistance that they could have secured,” they said of the American consultancy Alvarez and Marsal. “They are seeking to save face and the easiest choice is to wind down the business … The BRPs are in full retreat,” the document said.
It also reveals that the department’s consultants, Seabury Aviation Consulting, would deliver a preliminary business plan in a week. Seabury, which has advised the department to close down SAA and start a new airline, is no stranger to Airways Park, having worked on a turnaround strategy for SAA in 2017.
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Subz_84 Live the land in the those cities, sell everything
NEWS ANALYSIS: No-one comes out unscathed from the SAA blame game Pravin Gordhan and the business rescue practitioners are at an impasse, with no plan and no money Only Dongwana comes out unscathed
PETER BRUCE: Does anyone have a plan for SAA?The history of executives and ministers keeping the national airline aloft is a record of nauseating follies Bruceps Another R10 Billion Bruceps Yes. Revive, ruin, loot, repeat. Bruceps Pravin and the President has a plan
SAA gets R3.8bn, Eskom R33bn as Covid-19 ups SOEs' financial woesThe government has allocated R3.8bn to troubled national airline SAA as part of funding to state-owned entities in the current financial year, ending in March 2021. The similarly financially ruined Eskom will get R33bn for the same period. SAA? SAA e dirang ka zaka? Wonder how much will reach the hart of the problem and for how long. When will the next begging time get ready to pay. For f,ups of useless management.Once upon a time SAA was flying high when the right people ran it .now the empty vessel with suit and t
PETER BRUCE: Does anyone have a plan for SAA?The history of executives and ministers keeping the national airline aloft is a record of nauseating follies Of course not. The ANC just wants to steal our money. The last time the ANC had a good idea was 1994. ancMuatFall ANC has. They quite often have good plans. I have yet to see them execute on one though!
LETTER: Nothing left to rescue at SAAPublic enterprises minister is wrong to blame business rescue practitioners for being unfair to employees PG has finally delivered on the WMC mandate and practitioners can take a fall for it Gordhan fought tooth & nail for SAA to be sold just a few years ago. It is now apparent that this was driven by his hatred for Zuma & Myeni .. suddenly he believes SAA can be saved.. tito_mboweni must not give in into this crazy plan to waste our money If Gordhan & the unions want to save SAA they must go find a private buyer & leave public funds out of it.
Not all of Jo’burg’s street traders can sell their wares under lockdown - The Mail & GuardianStreet traders are central to food security in Johannesburg. But since being declared an essential service under lockdown, street trade in South Africa’s biggest city has returned to uneven ground. Terrible!