Govt commits R10bn in funding for SAA business rescue

The BRPs met with creditors on Friday to give feedback on developments and to determine a way forward since they last met in July. 

SAA has been in business rescue since December.

Dongwana says the practioners were considering two options for the airline – to wind it up or to liquidate.  

But government came to the party on Friday morning with the renewed commitment for funding. 

“In those interactions and correspondence with government, government conveyed the following very clearly to the BRPs: one, that government remains committed to providing the funding for the implementation of the plan as well as the restructuring of the airline and two, that government was looking at various mechanisms through which it could provide such funding to the company. As of today we are yet to receive the funding from government," Dongwana explained.

“It is important at this point to highlight that we have since received a further communication from government with the support of the National Treasury that indicate that there is a very clear Cabinet commitment to provide funding to SAA to the tune of R10.5 billion.” 

Dongwana said government is yet to finalise the timelines for the transaction. 

“The mechanism and the timelines are yet to be finalised and it is for this reason that we believe this provides us with a third and perhaps more important option that the company will have the funding from government that will enable it to restart its operations and that will also enable it to implement the business rescue plan."

The business rescuers will now weigh their options and are expected meet again next week. 

Dongwana says the rescue plan remains unchanged since it was approved in July. 

The plan proposes that 1000 workers would be retained permanently and up to 1000 others to be placed on a temporary training and layoff scheme for 12 months. 

SAA says it will contribute R4650 towards their pension fund, Unemployment Insurance Fund and medical aid. The balance of remuneration will only be paid when SAA can afford to absorb them or once they are laid off. 

The meeting with creditors comes amid renewed protests at the airline by unions, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (SACCA). 

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