SAA on the skids — on Friday, staff face two stark choices

There is not enough money to pay staff beyond April 30. File photo.
There is not enough money to pay staff beyond April 30. File photo.

SAA employees have until the end of Friday to reach an agreement with the airline's business rescue practitioners, who say the airline does not have enough money to honour their obligations to staff beyond April 30.

Joint rescue practitioners Leslie Matuson and Siviwe Dongwana said on Thursday that there were “only two options available”.

Employees, through their unions, now have to choose after the business rescue practitioners failed to secure a further bailout from government and a previously secured bailout of R5.5bn had run dry.

One option is winding down the business, terminating employees' contracts and paying out agreed severance packages.

A sales process would have to be undertaken to ultimately result in the distribution of proceeds to affected parties. “If an agreement can be reached with the employees a business rescue plan can be developed and published,” they said.

The second option would kick in should employees not agree on the first.

“If the practitioners cannot reach an agreement with employees, then the practitioners are unable to continue with the business rescue process and the practitioners will have to make an urgent application for an order discontinuing the business rescue proceedings and placing SAA into liquidation.”

They highlighted that the halt of operations due to the coronavirus lockdown had further strained the business and, therefore, there were no funds to pay employees after April 30.

SAA has been in business rescue for the past five months. Last month, the business practitioners  served employees with section 189 notices, alerting them of retrenchments.

They believed they had provided the best options to employees.

“It is the practitioners’ view that the proposed actions outlined above provide the most responsible way for a managed cessation of operations of the airline and managing the risks of all affected parties,” they said.

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