Government commits to funding a restructured SAA

The South African government has provided its commitment to support and source the funding of R10.3 billion needed to restructure South African Airways (SAA).

A source close to the matter said that a letter of support in which government makes this commitment to raise the requisite funding was signed by both the Minister of Finance Tito Mboweni and the Minister of Public Enterprises Pravin Gordhan on July 15, the deadline set in the business rescue plan. 

Read: 86% of creditors vote in favour of SAA rescue plan

DPE and pilots pull in different directions ahead of critical vote on SAA rescue plan

The commitment comes after 86% of SAA creditors voted in favour of the final rescue plan that is aimed at “attaining a financially and commercially sustainable and viable airline, and minimising the negative social impact of the restructure,” as director-general Kgathatso Tlhakudi said to creditors on Tuesday. 

The restructuring of the airline will include severance packages for over 2 700 workers who will receive voluntary severance pay totalling R2.2 billion. 

All employees, including their unions, have to reach an agreement on the reduction of employee numbers by July 17 failing which a section 189 process will be initiated by the rescue practitioners by July 22.

This is a developing story.