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SAA business rescue plan continues to see grey skies
Embattled state owned carrier South African Airways continues to see grey skies as its business rescue plans have been pushed back countless of times in the past six months, as well as recently being criticised by the courts for not making meaningful progress. Joining CNBC Africa for more on SAA’s business rescue is George Nel, Senior Business Rescue Practitioner at Corporate Business Rescue.
Wed, 01 Jul 2020 10:53:46 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The legal and stakeholder complexities in the business rescue process create challenges for SAA and its practitioners.
- The clash between social responsibility and economic viability complicates decision-making for state-owned entities like SAA.
- The influence of politics poses a potential obstacle to the successful completion of SAA's business rescue process.
South African Airways, the embattled state-owned carrier, continues to face challenges in its business rescue process. The airline's restructuring efforts have been marred by delays and criticism, with the recent court ruling highlighting the lack of meaningful progress. Joining CNBC Africa to shed light on the situation is George Nel, a Senior Business Rescue Practitioner at Corporate Business Rescue.
Nel acknowledges the complexities of the business rescue process, emphasizing the competing interests of the Companies Act and the Public Finance Management Act. These legal frameworks, coupled with the government's role as a shareholder, create a challenging environment for the business rescue practitioners. Despite receiving financial support and resources, the lack of a viable plan raises questions about accountability.
The finger of blame is not easily pointed, as Nel explains that various stakeholders, including unions and years of financial neglect, contribute to the current state of affairs. He emphasizes that South Africa's business rescue legislation is relatively new compared to other jurisdictions, highlighting the need for refinement and clarity in the process.
The juxtaposition of social responsibility and economic viability complicates the decision-making process for state-owned entities like SAA. The obligation to protect employees and fulfill public service mandates clashes with the financial imperative to turn a profit, adding another layer of complexity to the situation.
Comparatively, Nel notes the more timely and structured business rescue process of another airline, Comair, highlighting the importance of proactive intervention in distressed businesses. However, the specter of politics looms large over SAA's rescue efforts, with government factions and economic interests potentially hindering progress.
In conclusion, the turbulent waters of SAA's business rescue process underscore the need for clear communication, stakeholder alignment, and a delicate balance between social obligations and financial sustainability.
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