Business Maverick: Development Bank gives SAA wings By Sasha Planting
First came the announcement that the ANC had decided at its recent National Executive Committee meeting that SAA must be retained as the national airline. Then came the announcement that the Development Bank of SA would commit R3.5-billion in funding to the ailing airline, with an immediate draw-down of R2-billion.
The aim of the process is to either rescue SAA through restructuring – in order to maximise the likelihood of the state-owned airline continuing on a solvent basis – or to develop a plan that would deliver a better return for creditors or shareholders than would result from immediate liquidation. “Based on the availability of further funding, which National Treasury has undertaken to provide, and the ongoing support from all the stakeholders… the joint business rescue practitioners are of the opinion that there is a reasonable prospect of a successful business rescue, notwithstanding the inevitable risks and challenges.”
taken various actions to ensure that cash is conserved. As a result, we have sufficient funds to pay January salaries.”This is where the DBSA, which is fully owned by the government, stepped in.the next tranche of PCF, for a total amount of R3.5-billion, with an immediate draw-down of R2-billion.to meet the short-term liquidity requirements of the airline for the period until the business rescue plan is published and adopted,” a statement from the practitioners read.
“It is premature to comment and I have utmost confidence in the skills of the practitioners – Matuson and his team are the real deal – but this is a complex process.Gidon Novick, former CEO of Comair notes that the rest of the world is watching closely. “SAA is a symbol of how we make tough decisions as a country. It is very hard to make the argument that SAA is strategic – particularly in its current form.
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