Memorandum shows SAA administrators will not sell assets without involving govt

JOHANNESBURG (Reuters) – Administrators at state-owned South African Airways (SAA) will not sell assets for an interim period without involving the government, a memorandum signed by one of the administrators and the public enterprises ministry showed.

The memorandum, which was seen by Reuters, also said the administrators and the ministry had agreed that the objective of SAA’s bankruptcy protection process was to have a restructured SAA or a new company with no reliance on public finances.

A public enterprises ministry spokesman confirmed the memorandum was an authentic document.

The administrators were not immediately available for comment.

SAA’s administrators, appointed in December to try to rescue the firm, have said previously that a wind-down or liquidation of the loss-making airline were likely outcomes.

Senior officials at the public enterprises ministry have criticised the administrators for not coming up with a “business rescue plan” for SAA sooner and recently hired an aviation consultancy to advise them.

The “interim period” during which the administrators will not sell assets without consulting the ministry lasts until June 30 at the latest, the memorandum said.

SAA has not made a profit since 2011 and has received bailouts worth more than 20 billion rand ($1.1 billion) over the past three years. It is running low on cash after the coronavirus pandemic forced it to halt all commercial passenger flights and the government told the administrators it would not provide further funding.

($1 = 18.4902 rand)

(Reporting by Alexander Winning; Editing by Chris Reese and Leslie Adler)

This article was first published on Reuters Africa https://af.reuters.com/article/investingNews/idAFKBN22Q0W6-OZABS and is republished with its permission.

For more coverage on COVID-19 visit: https://www.cnbcafrica.com/covid-19/


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