SAA immediately suspends operations over funding shortfall
Business rescue practitioners say there has been some progress, but funding has not yet been fully found
Embattled airline SAA has suspended all operations "with immediate effect", its business rescue practitioners (BRPs) Les Matuson and Siviwe Dongwana announced on Tuesday.
Matuson and Dongwana said there had been "certain progress" in securing funding for the business rescue plan.
On September 18, the public enterprises department said the government would reprioritise funds to finalise the restructuring of SAA and the implementation of the airline's business rescue plan.
"An announcement to this effect will be in the Adjustments Appropriation Bill, which will be introduced in parliament soon. The national carrier will not be liquidated," the department said in a statement.
The announcement by the department follows a creditors' meeting called by the airline's business rescue practitioners on September 18, after government's failure to provide funding for the restructuring of the airline.
After the meeting, Dongwana said they had received a letter from the government indicating a clear commitment to provide the R10.5bn funding.
The department said because the restructuring process should be brought closer to finalisation in the next few weeks.
However, 11 days on and that funding hasn't been finalised - which is what led to the BRPs' decision on Tuesday.
"There has been certain progress throughout the previous week in relation to the securing of funding for the implementation of the business rescue plan, subject to certain terms and conditions," said Matuson and Dongwana.
"The BRPs and government have engaged with certain funders that have indicated a willingness to provide a portion of the funding required for the implementation of the business rescue plan. The BRPs are engaging with government in relation to the securing of the remaining funding that is required to fully implement the business rescue plan and what the implications would be for the company if it receives a portion of the required funding.
"In the interim, the BRPs have made a decision to suspend all the airline operations with immediate effect and are pursuing a process to put the airline under care and maintenance until funding discussions are completed."