Creditors of the South African Airways (SAA) on Tuesday voted in favor of a business rescue plan for the struggling airline.
According to SAA’s business rescue practitioners, Les Matuson and Siviwe Dongwana, the business rescue plan was approved earlier today with 86% of the vote.
“The practitioners welcome the approval of the business rescue plan with an overwhelming majority of those who voted… This is an important step forward for the airline and provides the much-needed security for a restructured SAA,” Dongwana said in response to the results. .
The Department of Public Enterprises, in turn, welcomed the result. This follows after the department, staff, trade unions and creditors of the SAA had earlier warned against the liquidation of the SAA. The department maintained that liquidation would lead to financial hardship and the undervaluation of assets.
“The department of public enterprises is of the opinion that [the approval of the business rescue plan] is a much better outcome for creditors and employees than liquidation. The government is confident that the implementation of the plan will balance the rights and interests of all parties, ”the department said.
However, the DA is not in favor of the business rescue plan as it comes at the expense of the taxpayer. “Despite their reckless lending to SAA over the past decade, with the full knowledge that the airline was bankrupt and could not pay its debts, the creditors can now benefit from South Africans without any liability for their actions,” said Alf Lees. , DA member of parliament’s standing committee on public accounts, said.
The development of the relevant business rescue plan took more than five months and Matuson and Dongwana were criticized during that time for all eternal delays.
According to spokespersons for Matuson and Dongwana, the department and the national treasury are expected to indicate on Wednesday whether the government will allocate R10.3 billion for the restructuring of the SAA.