Business

SAA Has Spent $539 Million Since Filing for Bankruptcy Protection: Practitioners

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CAPE TOWN—South African Airways (SAA) has spent just under 10 billion rand ($540 million) since it entered a form of bankruptcy protection, business rescue practitioners said on May 15 as they flagged a structured wind-down process as their preferred option for the carrier.

The troubled state-owned airline, which has not made a profit since 2011 has been burning cash and is dependent on government bailouts to remain solvent. It entered business rescue in December in a last-ditch bid to save the company.

“In terms of the amount of money that has been utilized… by the airline from the fifth of December to the end of April we indicate that the total spend was 9.9 billion rand,” Siviwe Dongwana, joint business rescue practitioner appointed to turn around SAA, told lawmakers on Friday.

A fifth of the money was spent on aviation fuel and 16 percent went on salaries and allowances, he said, referring to some of the major expenses incurred during this time.

Administrators at SAA said in the absence of extra funding the best way forward might be to run a structured wind-down of the business rather than liquidation, which opposition parties have called for.

“There is no question of doubt in my mind that a liquidation process would materially erode value and the net recovery for creditors could be an absolute disaster,” said Les Matuson, joint business rescue practitioner at SAA, when answering questions from lawmakers.

Early this month South Africas Labour Court ordered a halt to layoffs at the ailing airline, siding with two trade unions who had argued that the airlines admiRead More – Source