SAA creditors urged vote for business rescue plan

A vote is set to be held on Thursday. 

The department will meet with SAA’s creditors, employees and other stakeholders to decide the fate of the airline. 

Spokesperson Sam Mkokeli says a business rescue plan would result in a better return for all parties compared to liquidation.

“As the shareholder on behalf of government, the DPE believes the approval of the business rescue plan would help creditors and employees to be co-creators of a new airline and ensure a strong base is maintained for the growth of the local aviation industry.”

Cash-strapped SAA was placed under business rescue in December last year. 

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A 75% vote from creditors, employees and other stakeholders would be required to continue with the business rescue plan.

Failure to do so could result in a R32 000 severance settlement for all employees, no matter the number of years employed at the airline. 

This would also mean that creditors would receive far less debts owed to them by SAA. 

“There would also be a loss of opportunities to provide the new airline with technical, financial, and operational expertise and overall future business partnerships and the severance benefits to retrenched employees would be capped across the board, regardless of years of service,” adds Mkokeli. 

The department believes business rescue is the only way to go. 

"That is why the government has made R5.5 billion to BRPs to augment the revenue of SAA - to develop a detailed business rescue plan, to consult with creditors, other affected stakeholders like employees, the shareholder and the board and management of the company under business rescue," concludes Mkokeli