South African Airways (SAA) as we know it will no longer exist. The SAA Business Rescue plan was adopted with 86% of the creditor’s voting in favour of the amended plan.
Government also welcomed the vote in favour and applauded creditors and stakeholders for realising that a new, restructured, competitive airline, is the best option to immediately take the airline back to the skies. In terms of the Companies Act, the proposed rescue plan may be implemented subject to funding being obtained.
The Department of Public Enterprise has also undertaken to provide proof of funding for the plan to go ahead as required by the Companies Act.
The Department of Public Enterprise says they will appoint a new interim board in the coming weeks with its current acting COO Philip Saunders acting as the new interim Chief Executive.
“We have received proxy’s and 86% are in favour of the business rescue plan of SAA. In the vote, in terms of the Act, the business plan will be approved on a preliminary basis if it is supported by the holders of more than 75 percent of the creditor voting interest and in this case and the second part the votes in support of the proposed plans included at least 50% of the independent creditors voting interest. The non-independent interest if less than a percent,” says Siviwe Dongwana, one of the joint Business Rescue Practitioners.
Acting Director-General at the Department of Public Enterprises Kgathatso Tlhakudi earlier urged creditors to vote in favour of the plan. He said it was in the best interest for government to support the restructuring of the airline. He says the new airline will be an attractive asset for an equity partner.
“The old way of contracting for labour and services will be departed, proactivity and efficiency will guide the performance of the management system of the airline going forward. The SAA that will emerge from restructuring is going to be assets. We have also started a process of getting a transaction advisor in place to pair up the engagements that we have been having as government with prospective strategic equity partners.”
In the video below, unions happy for securing jobs for more workers at SAA:
Last week, government and six major labour unions reached an agreement regarding retrenchments at SAA. All unions except those representing pilots had accepted the new Voluntary Severance Package deal.
About 2 700 employees will lose their jobs. However, the retrenchment packages will be supported by a social and skills development plan through SETA for those who will lose their jobs.
“We have reached a point of saving the airline. It is no longer about just saving it here and there but it is about saving the airline. We are all avoiding liquidation. We know that what caused the airline to come to its knees was poor governance, corruption, looting and now that must be changed. We are ready to engage and start afresh,” says National Transport Movement (NTM) President, Mashudu Raphetha.
The new plan will also mean that employees will also get preference when a position becomes available in a new, restructured national airline that must emerge from the rescue process- provided they have the required skills and competence. The severance package for employees includes one-week pay calculated per year of completed service, one-month notice pay, accumulated leave paid out and a 13th cheque.
Government will need additional R16 billion to fund the airline’s rescue plan.
Source: SABC News (sabcnews.com)