As South African Airways (SAA) is down to the last R99-million it can borrow against government’s guarantee‚ it should be “placed under business rescue”‚ the Democratic Alliance (DA) said on Thursday.
The party made this claim in the wake of a court this week ordering SAA to pay R104-million‚ plus interest to Nationwide Airlines for anticompetitive conduct‚ and reports that the cash-strapped airline might face a further court bill as a similar claim by Kulula’s owner‚ Comair.
Also read: SAA must pay R104m for anticompetitive conduct
The DA’s Alf Lees described the ruling as “just another nail in the beleaguered airline’s financial coffin”.
“The judgment has set precedent‚ which should be of concern to the National Treasury and the Minister of Finance‚ Pravin Gordhan‚ as Comair is seeking damages in excess of R1-billion in litigation based on similar circumstances‚” said Lees.
“This is certain to plunder SAA into further financial disarray‚ necessitating the need for the airline to be placed under business rescue.”
Lees put the total of the Nationwide award at R140-million — “once interest charges are added” – and said that “SAA now has no wriggling room left‚ as the remaining R99-million that it can borrow against the R15-billion government guarantee is not enough to meet the Nationwide judgement”.
“R140-million added to the leaked first quarter loss of R 1.3-billion means that SAA will in all likelihood start defaulting on creditor payments‚” he said.
“The Nationwide liquidators do not have the burden of President (Jacob) Zuma holding them back and they will be forced to file for the liquidation of SAA should the inevitable happen and SAA are unable to honour the R140-million compounded by this court order.”
– TMG Digital
Place SAA under business rescue or it will be liquidated‚ DA warns
As South African Airways (SAA) is down to the last R99-million it can borrow against government’s guarantee‚ it should be “placed under business rescue”‚ the Democratic Alliance (DA) said on Thursday.
The party made this claim in the wake of a court this week ordering SAA to pay R104-million‚ plus interest to Nationwide Airlines for anticompetitive conduct‚ and reports that the cash-strapped airline might face a further court bill as a similar claim by Kulula’s owner‚ Comair.
Also read: SAA must pay R104m for anticompetitive conduct
The DA’s Alf Lees described the ruling as “just another nail in the beleaguered airline’s financial coffin”.
“The judgment has set precedent‚ which should be of concern to the National Treasury and the Minister of Finance‚ Pravin Gordhan‚ as Comair is seeking damages in excess of R1-billion in litigation based on similar circumstances‚” said Lees.
“This is certain to plunder SAA into further financial disarray‚ necessitating the need for the airline to be placed under business rescue.”
Lees put the total of the Nationwide award at R140-million — “once interest charges are added” – and said that “SAA now has no wriggling room left‚ as the remaining R99-million that it can borrow against the R15-billion government guarantee is not enough to meet the Nationwide judgement”.
“R140-million added to the leaked first quarter loss of R 1.3-billion means that SAA will in all likelihood start defaulting on creditor payments‚” he said.
“The Nationwide liquidators do not have the burden of President (Jacob) Zuma holding them back and they will be forced to file for the liquidation of SAA should the inevitable happen and SAA are unable to honour the R140-million compounded by this court order.”
– TMG Digital
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