Liquidation of SAA not 'current scenario', say business rescue practitioners

While struggling state-owned airline South African Airways has not yet received an additional R2bn in funds from Treasury to help finance its business rescue process, its business rescue practitioners say that liquidation is not yet on the cards.

Speaking to Fin24 by phone on Thursday morning, Louise Brugman, spokesperson for business rescue practitioners of the airline, Les Matuson and Siviwe Dongwana, confirmed that the R2bn in funding from Treasury is still outstanding.

BusinessDay on Thursday reported that SAA is on the brink of liquidation because of lack of funds. 

In a separate joint statement on Thursday morning, Matuson and Dongwana denied claims of imminent liquidation, saying that there are typically liquidity constraints for companies into business rescue. They added that government is still supportive of the process.

"Government continues to indicate its support for the business rescue process and together we are considering various scenarios to keep the entity operational. 

"We remain hopeful that a mechanism can be found to unlock the liquidity constraints. The liquidation of SAA is not one such current scenario," they said.

President Cyril Ramaphosa ordered that SAA enter into voluntary business rescue in December. The business rescue practitioners held their first meeting with SAA's creditors later that month. Lenders have committed R2bn to the process, Fin24 previously reported, but the airline is still awaiting matching funds from Treasury. 

Matuson said in December, following a meeting with creditors, that the aim of the business rescue process is to either rescue SAA through restructuring - in order to maximise the likelihood of the state-owned airline continuing on a solvent basis - or to develop a plan that would deliver a better return for creditors or shareholders than would result from immediate liquidation.

Fin24 is yet to receive comment from Treasury on the matter. 

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