JSE-listed airline, <a href="https://www.cnbcafrica.com/videos/2020/02/27/comair-ceo-on-covid-19-impact-on-business/">Comair</a>, has announced the group will enter business rescue to safeguard the interests of the company and its stakeholders after the <a href="https://www.cnbcafrica.com/videos/2020/05/04/covid-19-lockdowns-when-is-the-right-time-to-reopen-economies/">COVID-19 crisis</a> disrupted the implementation of a turnaround plan.



In its H1, FY20 results Comair reported a half-year loss of R564 million. Although revenue grew by 3%, this was reportedly not enough to offset cost increases of 14% resulting from significantly higher fleet and maintenance costs.



Read the full statement below:



Comair enters business rescue in response to unprecedented circumstances resulting from Covid-19



&#8211; Move aims to restructure the airline as a sustainable business



Tuesday, 5 May 2020: Listed airline company, Comair, today announced the group will enter business rescue to safeguard the interests of the company and its stakeholders after the Covid-19 crisis disrupted the implementation of a turnaround plan.



Comair CEO, Wrenelle Stander, said the company, which reported a half-year loss of R564 million for H1 F20, faced an unprecedented situation following the Covid-19 lockdown.



“While we had started making good progress to fix the financial situation six months ago, the crisis has meant we have not been able to implement it as we intended.



“We completely understand and support the government’s reasons for implementing the lockdown, however as a result we have not been able to operate any flights. Now that the phased lockdown has been extended the grounding is likely to endure until October or even November. These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs. The only responsible decision is to apply for business rescue.”



In terms of the lockdown Comair was required to stop flying on 26 March and has not operated any passenger services since. The Covid-19 crisis has also severely affected the global airline industry. A number of carriers have gone out of businesses. Others such as Virgin Australia and Air Mauritius have implemented restructuring processes, similar to business rescue.



“Comair remains solvent and an important contributor to the South African economy. This is a necessary process to ensure a focussed restructuring of the company takes place as quickly as possible so we can take to the skies again as a sustainable business and play our part in the county’s airline industry,” says Stander.



Shaun Collyer and Richard Ferguson have been appointed as the joint business rescue practitioners with effect from 5 May 2020.



Comair was granted approval to suspend the trading of its shares on the JSE with immediate effect. The business rescue practitioners will provide shareholders and all other stakeholders with further updates throughout the process.



The business rescue process will build on the turnaround plan that Comair management was already implementing. It aims to preserve cash, cuts costs, dispose of non-performing assets and strengthen the balance sheet. The Section 189A process, which was part of this plan and that began on 23 March, will continue.



The business rescue practitioners will work with the management team and the board towards Comair resuming operations in accordance with all regulatory requirements, including the health protocols to prevent the spread of Covid-19. Stander said Comair will resume its operations in accordance with government directives and will continue to engage with government to accelerate the opening of the airline industry.



“The health and welfare of our customers, crew and the public is the overriding priority and we will only operate when we are sure we can do so safely.”



Customers with existing bookings will be able to rebook flights within 12 months of their departure date. There will be no charge for any changes made before 1 November 2020.



“Through this process we intend to right-size our operations to be more efficient, agile and customer-centric. This includes, but is not limited to, reconfiguring our network and fleet mix, reviewing portfolios and joint ventures, increased digitisation of the business and new product development and delivery,” says Stander.



“We are confident that with the work we’ve already done and the support of our stakeholders we will get through this process and will be a more sustainable business, better positioned to continue serving the flying public and contributing to the South African economy.”



The business rescue practitioners will contact all stakeholders and suppliers to plan the way ahead in accordance with the processes set out in the Companies Act.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

International travel for South Africans is now allowed, this is how it will work

COVID-19: SA based airline Comair enters business rescue

Companies, which are registered through the Companies and Intellectual Property Commission&#8217;s (CIPC) BizPortal to perform essential services during <a href="https://www.cnbcafrica.com/videos/2020/04/09/the-economic-cost-of-covid-19-on-south-africa/">South Africa’s COVID-19 lockdown</a> period, are required to have a new certificate from the BizPortal website for the extended period, which begins on 17 April 2020.



For more details, read the statement below:



CIPC CERTIFICATION PROCESS FOR ESSENTIAL SERVICE BUSINESSES DURING EXTENDED LOCKDOWN



Companies, which are registered through the Companies and Intellectual Property Commission&#8217;s (CIPC) BizPortal to perform essential services during the lockdown period, will be required to have a new certificate from the BizPortal website for the extended period, which begins tomorrow 17 April 2020.&nbsp;



The certificate will be sent via email using the details provided at the time of registration, and will also be available for download from today. Companies will receive the certificates from today and the full list of registered companies will have received their certificates by the weekend.&nbsp;



The new certificate will clearly state that it is for the extended lockdown period, beginning 17 April 2020, and South African Police Service officials will be told which certificates to look for.&nbsp;



Certificates issued before today will no longer be valid and must be disposed of. To provide time for businesses to adjust to the new requirements, the new certificates will be available to be displayed from start of business on Monday, 20 April 2020.



The department reminds the public that possession of the CIPC certificate is still subject to the company fully complying with the applicable Lockdown Regulations and is a record of the company’s details, and does not in itself constitute the right to continue operating during the period.



Only businesses which provide essential services in terms of the Lockdown Regulations, as amended, issued by the Minister for Cooperative Governance and Traditional Affairs may continue their operations during the COVID-19 lockdown.&nbsp;



The CIPC certificate is a reference to the legal registration of the company in terms of the Companies Act, 2008 (Act No. 71 of 2008) and a record of registration to the CIPC. It does not give a firm or individual a right to trade if that company does not fall into an Essential Service as defined in the Lockdown Regulations.



The Department clarifies that the registration portal is only for companies registered in terms of the Companies Act. Other essential service providers, like healthcare professionals registered with the Health Professions Council of South Africa, sole proprietors who provide essential goods and services (like small business owners and spaza shops), and small-scale farmers will not register through the Bizportal. These businesses will not have a CIPC certificate, but must still comply with the provisions of the lockdown regulations.



Where the CIPC finds that certificates have been issued to companies which do not meet the definitions of an essential service, such certificate will be revoked, and the company will be referred to the South African Police Services. False declaration by the company is a criminal offence and will result in prosecution, in terms of Lockdown Regulations.



The regulations for the extended lockdown have also clarified that the transportation of liquor is prohibited, except where alcohol is required for industries producing hand sanitizers, disinfectants, soap, alcohol for industrial use and household cleaning products.



To confirm if your business complies, please consult the necessary regulation at <a href="https://www.gov.za/documents/disaster-management-act-regulations-address-prevent-and-combat-spread-coronavirus-covid-19">https://www.gov.za/documents/disaster-management-act-regulations-address-prevent-and-combat-spread-coronavirus-covid-19</a>.



Issued by the GCIS on behalf of The Department of Trade, Industry and Competition



16 April 2020



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Here’s how to apply for SA’s COVID-19 loan guarantee scheme

Companies Act

COVID-19: SA based airline Comair enters business rescue

Essential services require new CIPC certificate during South Africa’s extended COVID-19 lockdown

News Tips

Advertise With Us

Companies Act

COVID-19: SA based airline Comair enters business rescue

Essential services require new CIPC certificate during South Africa’s extended COVID-19 lockdown

News Tips

Advertise With Us

Newsletters