SAA rejects allegations of business rescue, liquidation

Cape Town - South African Airways (SAA) has never been in a state where business rescue is needed, spokesperson Tlali Tlali told Fin24 on Friday afternoon.

"Business rescue, properly understood, means a company is unable to meet its financial obligations as and when they are due and payable. That, however, is not where we are at," said Tlali.

"There seems to be a misunderstanding of our going concern guarantee requirements. Some people suggest we need a guarantee in order to stay afloat now and we are saying that is an incorrect interpretation. SAA is resilient and has overcome challenges in the past."

He said SAA needs a going concern government guarantee in order to finalise its annual financial statements. The matter has been brought to the attention of National Treasury, which is the airline's shareholder representative and there are extensive, on-going engagements with the aim of finding a resolution and to provide certainty to all concerned.

READ: SAA's Yakhe Kwinana can run, but she can't hide - Outa

In a statement issued on Friday, SAA said its board continues to do everything in its power to ensure SAA gets government guarantees. It has also engaged with Treasury on a licensing issue which also relies on Treasury's financial assurances for its renewal by the end of September.

Finance Minister Pravin Gordhan said earlier this week a “good announcement” regarding SAA can be expected “shortly”.

"While it is true that the airline’s balance sheet needs to be strengthened, it is important to understand that its funding requirements, whether in the form of guarantees by the shareholder or a cash injection - which the airline has not received for more than a decade - are intended for future and not current or immediate obligations," the SAA statement reads.  

Tlali said SAA is not facing liquidation, as no such decision has been communicated by the SA government as the sole shareholder of the airline. SAA remains confident that solutions will soon be found.
 
"SAA has neither defaulted nor been unable to meet its obligations to service its debts – a key determining factor to justify placing a company under business rescue. Those advocating for business rescue are making an absurd misdiagnosis," said Tlali.

READ: WATCH: Under-fire Gordhan reveals SAA deadlock will soon end

In his view, those making these business rescue claims do not seem to take into account the impact they have on the airline and the country.

SAA also denies allegations of there being a rift between Finance Minister Pravin Gordhan and SAA chair Dudu Myeni. To the contrary, SAA alleges these kinds of statements are made by people trying to drive a wedge between Gordhan and Myeni.

The airline reiterated in that SAA board members "do not appoint themselves", but serve at the invitation of its shareholder representative. Any board rotations or new appointments would, therefore, be the prerogative of the shareholder representative.

Tlali said it is highly unlikely that there will be service interruptions in September or October anywhere on SAA's route network, including Hong Kong.

"Where concerns are raised by the relevant regulatory authorities, we continue to engage with them to ensure that we remain compliant and continue to operate," he said.
 
"We would like to assure all our customers that as part of our compliance and business continuity processes, we constantly ensure that we meet the compliance requirements in all jurisdictions and markets where we operate."

ALSO READ: EXCLUSIVE: SAA banking tender deferred due to debt consolidation

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