SAA’s business rescue practitioners have warned that failure to secure outstanding funding from government by next week could derail the business rescue process completely.

The BRPs issued a notice to affected persons on Thursday stating that procuring the required funding was one of two outstanding issues that were critical to the implementation of the adopted business rescue plan. The other is the termination of existing aircraft leases.

Louise Brugman, spokesperson for the BRPs, told Tourism Update that while the government had paid approximately R9.3bn (€468m) to lenders, no money had been released of the roughly R10.2bn (€513m) required for restructure.

Moreover, Brugman says the immediate requirement is for roughly R5bn (€251m), which is needed by next week to continue the business rescue. This includes R800m (€40.2m) required for creditors, R2.2bn (€110m) for restarting costs and R2bn (€100m) for voluntary severance and retrenchment packages.

“The BRPs have been engaging tirelessly with Government to ensure that this funding is made available to the company timeously,” the notice reads. “In the ongoing engagements on this issue, Government has continued to express its commitment to making this funding available and has undertaken to do so during the course of next week.”

 The BRPs said in the notice that they had undertaken to advise affected persons of the progress made in advancing this funding on September 17, and that, should they not be satisfied that sufficient progress had been made, a meeting with creditors would be convened on September 18.

The BRPs said in the notice that SAA had entered into termination agreements in respect of 33 of the 40 aircraft leases and hoped the termination of the remaining aircraft leases would be finalised at the end of the month. In the event of failure to do so, SAA will have to institute legal proceedings to cancel these leases.

In response to the BRPs’ notice, the Department of Public Enterprises issued a public statement. While it made no commitment to advance funds by any specified time, the department said it remained confident that a solution would be found in time to avoid liquidation of SAA.

“[E]fforts to finalise the South African Airways business rescue process and the restructuring of the airline are ongoing and a decision on the sources of funding will be announced soon,” the statement reads. “The DPE welcomes the decision of the BRP to keep the creditors informed about the process and the likelihood of a meeting of the creditors' committee.”

The department also said it continued to assess unsolicited expressions of interest for the new SAA. “A number of engagements have been undertaken with the potential partners, and the interest is encouraging that a suitable long-term investor will be found to enable the relaunch of the airline and its subsidiary businesses and divisions.”