South African Airways’ rescue practitioners are seeking an extension to the deadline for publishing a business plan for the troubled flag-carrier.
Under South African legislation a business plan is normally required within 25 days of a company entering business rescue, but extensions can be granted if necessary.
SAA, however, has spent nearly six months in the rescue process, after the rescuers sought three separate extensions – of 70 days, 32 days and 70 days – with the intention of publishing the plan on 29 May.
But practitioners Les Matuson and Siviwe Dongwana state that South Africa has been in a state of lockdown since 26 March, before which the rescuers were in the “advance stages” of drawing up a draft plan to restructure SAA.
“Unfortunately, the draft plan for a restructured airline, which was near complete, could not be finalised,” they say, owing to the impact of the coronavirus crisis which “nullified all the assumptions” on income projection.
SAA’s shareholder – the government – has not been prepared to fund care-and-maintenance proposals to bridge the period of uncertainty before a new plan could be devised, and the practitioners opted for a structured wind-down for the airline.
But the government has stepped in with a proposed restructuring plan which will be included and put to creditors and employees for consideration by 29 May, with discussions set to take place from 1 June.
“Despite the revised plan being ready for publication, further consultation with affected persons is required before the plan can be published,” the practitioners say.
They are formally seeking an extension of the publication deadline to 8 June to give stakeholders “reasonable time” to consult on the plan.
“[We] will, however, endeavour to publish the plan as soon as they are in a position to do so and will keep creditors updated on the progress of the development of the plan,” they state, adding that they will continue to take any necessary measures to conserve SAA’s cash and protect its interests.