Seven parties showing interest in buying or investing in SA Express, say liquidators

A SA Express jet on Cape Town International Airport's runway.
A SA Express jet on Cape Town International Airport's runway.
Gallo Images/Grant Duncan-Smith
  • The number of parties showing an interest in the state-owned regional airline has grown from just two to seven.
  • The airline was was placed into provisional liquidation in late April.
  • Liquidators say it is still 'extremely early' in the liquidation process.

The provisional liquidator for state-owned regional airline SA Express says that the number of parties interested in buying or investing in the airline has grown from just two to seven, while its ultimate fate it still being considered. 

Aviwe Ndyamara was briefing Parliament's Standing Committee on Public Accounts on Wednesday. The briefing took place after the North Gauteng High Court in Pretoria ruled on Monday that the airline's provisional liquidator could sell or transfer the airline's property.

While SA Express and SAA are both state-owned airlines, they are distinct businesses. SAA was placed into business rescue in December 2019. Its business rescue practitioners published their long-delayed business rescue plan on Tuesday evening. 

About two months after SAA went into voluntary business rescue, SA Express was placed into business rescue by an order of the court.  It entered provisional liquidation in late April this year after its joint business rescue practitioners filed an urgent court application.

Ndyamara he told parliamentarians on Wednesday that the the regional airline's liquidators would continue investigating the affairs of the company while starting to engage a sales process.

"We are not yet in the position to quantify the costs of the sales process; however, all expenses incurred will form part of the liquidation administration expenses. We are in the process of engaging more than six interested parties," said Ndyamara.

Ndyamara said with the finalisation of an interim valuation complete, the liquidators managed to reduce the bond of security of SA Express from R1.8 billion to R113 million. This refers to security required by a master of the high court when appointing a custodian, in this case the provisional liquidators, over an asset, in this case SA Express.

He said the airline had an ongoing lease agreement for offices and hangars for R2.2 million a month, and ongoing aircraft and engine lease agreements of no less than R22.5 million a month.

"Immediate consideration must be given to the termination of the onerous lease agreements however this may result in an impact of the licenses," Ndyamara said.

The airline currently holds two licenses which are scheduled to expire in late July, as well as approval to act as an aviation security training organization approval which expires on 31 December. Ndyamara said the liquidators hoped to engage a sales or investment process before the licenses expire.

'Never investors, only vultures'

SCOPA members found little comfort in the submission of the liquidators in terms of ensuring accountability for the transactions, leadership failures and mismanagement that sent SA Express on the path to business rescue.

SCOPA member and Democratic Alliance MP, Alf Lees, asked Ndyamara what the funding expectations were for the parties interested in buying or investing in the airline.

He also asked what actions have been taken to hold accounting officers accountable for a failure to pay the South African Revenue Service or pay over Unemployment Insurance Fund provisions.

Ndyamara said the North Gauteng High Court ruling empowered liquidators to inquire about specific transactions at the airline. He agreed that there were statutory payments that were not honoured.

"We are extremely early in the liquidation process. It is early stages. If you look at the extension of our powers, it looks at inquiries where we can investigate these affairs and transgressions that may have happened before business rescue or liquidation," he said.

ANC MP Mervyn Dirks, meanwhile, said a litany of leadership failures at SA Express meant there were "never investors for this airline, there were only vultures".

Committee chair Mkhuleko Hlengwa, meanwhile, said National Treasury must come before the committee and explain its role as it relates to finance and the overall approach of government to SA Express. 

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