SAA exits business rescue

After SAA went into business rescue late last year, many routes were suspended. Photo: Gallo Images/Getty Images
After SAA went into business rescue late last year, many routes were suspended. Photo: Gallo Images/Getty Images

BUSINESS


On Friday, struggling national airline SAA exited business rescue after roughly 17 months of turmoil and uncertainty.

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.

Its administrators said that they had filed a notice of “substantial implementation” of a business rescue plan with South Africa’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”.

They added that SAA was now solvent.

The airline is one of a handful of 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, which is responsible for SAA, said 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,” it said.

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

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