1time Holdings, the parent company of South African low-cost carrier 1time Airline, has filed for business rescue under Chapter 6, Section 129 of the Companies Act.
Section 129 makes provisions for "financially distressed" companies to be placed under supervision and begin restructuring without intervention by creditors.
1time Airline chief executive Blacky Komani says the carrier will "continue normal operations" while the restructuring plan is formalised.
"What business rescue does is to give us the protection we need for a few months while we agree a business rescue plan with creditors and other stakeholders so that they will support the airline into the future," he explains.
"It gives us the opportunity to stabilise the trading environment, reorganise the business financially, and strategically emerge a healthier company."
A business rescue practitioner will be appointed within "the next few days," the company adds in a statement.
1time Holdings, which also includes maintenance arm Jetworx, posted a net loss of 157 million rand ($18.9 million) for the full year to 31 December 2011. At the time, its net debt stood at 295 million rand.
The airline runs scheduled domestic and regional services from its main bases in Johannesburg, Cape Town and Durban. It operates a fleet of 10 Boeing MD-80s, according to Flightglobal's Ascend Online database.
Shares in 1time Holdings were down 42.9% to 8 cents on news of the business rescue filing.