1time was drowning in debt
A BUSINESS rescue specialist who was supposed to save troubled 1Time Airline has thrown in the towel by filing for the provisional liquidation of the low-cost airline company as it is drowning in debt of about R462-million.
This is contained in court documents in which business rescue practitioner Gerhardus Holtzhauzen yesterday applied for an urgent order in the Pretoria High Court to have 1Time wound up. The matter will be heard in court today.
The documents reveal for the first time the extent of the company's woes. The court application comes after 1Time last Friday left passengers stranded when it announced that it was ceasing operations.
The closure was linked to the pulling out of a UK investor, who had planned to inject funds that were needed by 1Time to stay afloat.
In the court papers, Holtzhauzen argues for the winding up of 1Time as the company's liabilities amount to R462-million. They include secured debts costing R110-million, aircraft engine debts of R15-million and "various unsecured debt of R375-million".
The company's assets total R38-million. These include 1Time's immovable property that is worth R12-million, movable assets of R3.8-million, aircrafts worth R16.4-million and trade receivables to the amount of R5.5-million.
"It is therefore clear that 1Time's liabilities exceed its assets by R462-million and it is clearly insolvent."
Holtzhauzen proposed that the company's operating licence be active until the winding-up process had been concluded. He also argued that 1Time's business rescue plans should be discontinued.
He fingers parastatal Airports Company of South Africa (Acsa) of allegedly kicking 1Time when it was down. He said that on August 21, Acsa started requiring 1Time, due to its historical financial difficulties, to only make payment electronically.
Acsa also told 1Time to start paying debt the company would incur over weekends and public holidays in advance.
"I confirm that the aforesaid change in Acsa's policy placed additional constraints on the 1Time cash-flow over and above the other challenges the company faced," he said.
Blacky Komane, the CEO of 1Time, refused to comment, saying he would wait until the court had made its decision.
Holtzhauzen added that 1Time needed between R60-million and R80-million and also to conduct debt equity swaps for the business rescue to be successful. "These two initiatives would have recapitalised the balance sheet of the company into a solvent position," he said.
He said 1Time shareholders and creditors were reluctant to implement the proposals as Acsa's position on the business rescue was uncertain.
Holtzhauzen said he attended a meeting with 1Time directors last week Friday, in which he informed them that there was no prospect to save the company, and operations should be suspended by midnight.
To survive last weekend, 1Time needed R3.4-million. Obtaining the short-term loan from creditors proved unsuccessful.
He said a UK investor on Monday formally expressed renewed interest in acquiring 1Time. "Unfortunately for various reasons . this possibility cannot be further explored under the business rescue procedure due to 1Time's commercial and factual insolvency," he said.
Holtzhauzen said delays while 1Time is grounded and not operational will "most certainly influence any goodwill that may be left in its business and it is of the utmost importance that the liquidation order be granted as a matter of urgency".