Kulula.com, British Airways operator delists from JSE in line with rescue plan

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Comair is already operating all the domestic routes it offered before the coronavirus lockdowns started.
Comair is already operating all the domestic routes it offered before the coronavirus lockdowns started.
  • In terms of its business rescue plan, the listing of Comair on the JSE has been removed.
  • The five main shareholders will now make an offer to the minority shareholders.
  • The rescue practitioners say Comair can now apply for a loan under government's Covid-19 Loan Guarantee Scheme.

Comair's listing on the JSE has been removed on Wednesday, in line with its business rescue plan.

Comair operates its own low-cost airline Kulula.com, as well as British Airways as part of a licence agreement.

A general offer will soon be made to purchase all Comair shares still held by minority shareholders at 4.26 cents per share, as set out in the approved the rescue plan.

Comair CEO Glenn Orsmond explains that the company is now effectively owned by five main investors who together hold about 99% of the shares. Although Comair is now delisted, it remains a public company.

Hurt by lockdown

"We are focusing on growing the business. We were hurt by the lockdown during the second wave of coronavirus infections in SA from the beginning of January until mid-February, but we have seen a strong pick-up in traffic in March with load factors of over 75%," says Orsmond. "We are currently operating more than 17 aircraft and stared using Lanseria airport again in March."

Comair is already operating all the domestic routes it offered before the coronavirus lockdowns started and on a regional level, it has started with flights to Harare and Victoria Falls.

"So far April is looking good and we see the overall domestic leisure market travel as similar to before the lockdown. Where demand is lacking, however, is in business travel and the international market. We did see local business travel increase, though, over the past three months and it is currently probably at about 30% of levels before the lockdown," said Orsmond. "We need to be ready for when the international market returns, hopefully by about June."

According to Comair's business rescue practitioners, their focus has been to implement the rescue plan to ensure that Comair can emerge from the process as a sustainable business. 

"As a result, we have not nor can we meet the listing requirements or the associated costs, which is why the JSE will terminated the listing from the start of business on 7 April 2021," explained the rescue practitioners. 

"Importantly, this will allow Comair to apply for R100 million under the Covid-19 Loan Guarantee Scheme, which is not available to listed companies."

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