BROWSE

UPDATE 1-South African Airways administrators hope to exit by month-end | Reuters

The administrators of South African Airways (SAA) hope to hand control of the business back to management by the end of the month, the state-owned airline said in a letter to affected parties seen by Reuters.

SAA has been under a form of bankruptcy protection since December 2019, and its fortunes worsened during the COVID-19 pandemic. All operations were mothballed in September 2020 when funds ran low.

The letter, dated March 18, said SAA’s board of directors and management were working on a plan to resume flights, without giving a date when that might happen.

The administrators said they had received 7.8 billion rand ($529 million) out of a 10.5 billion rand bailout allocated in the government’s October mid-term budget.

Out of that, around 360 million rand has gone towards paying unpaid salaries, 1.5 billion rand has been spent on severance packages and 400 million rand has been transferred to creditors who lent money after the airline entered administration.

Other funds are earmarked for working capital when SAA restarts operations and to pay for passengers who have already paid for tickets but not yet flown.

Once further payments to creditors and employees have been made or provided for and a receivership set up, the administrators can relinquish control of the business.

The administrators said SAA’s debt had fallen by 35.7 billion rand since they took over and that its workforce had been cut from 4,700 to roughly 1,000. $1 = 14.7496 rand Reporting by Alexander Winning. Editing by Nqobile Dludla and Mark Potter

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