SAA creditors approve business rescue plan and Phillip Saunders is appointed as interim CEO.
On Tuesday 14 July, 86 percent of South African Airways’ (SAA’s) creditors voted to adopt the airline’s proposed business rescue plan that will require the government or a strategic equity partner to provide an additional R16.3 billion in funding.
This follows Finance Minister Tito Mboweni’s supplementary budget announcement at the end of June, in which he didn’t allocate any additional funds for SAA.
The plan gives SAA a chance to avoid liquidation.
Shortly before the creditors voted, Department of Public Enterprises acting director-general Kgathatso Tlhakudi addressed the meeting to say that the government supports restructuring SAA into a commercially sustainable airline, while minimising the impact of the airline’s restructure on job losses. In his view, the airline that will emerge from the restructuring process will be an attractive asset for an equity partner.
He also said the department will be announcing an interim board of the "new SAA" soon with Phillip Saunders, who currently serves as SAA’s chief commercial officer, as its interim CEO.
SAA went into business rescue in December last year after its financial losses totalled more than R10 billion over the past two years.