Crucial vote over SAA business rescue plan postponed for three weeks
SAA’s creditors will now only vote on the airline's business rescue plan in three weeks' time.
This is after separate proposals calling for an adjournment by creditors and unions were successful on Thursday.
Private airline SA Airlink, which is owed around R500m by embattled state airline SAA, put forward a proposal, which was joined by other creditors, saying it hadn’t received adequate answers to questions posed about the business rescue plan.
On Wednesday, SA Airlink’s court bid for an urgent interdict failed as the judge considered it not urgent.
In a separate proposal, the National Union of Metalworkers of SA (Numsa), the South African Cabin Crew Association (Sacca) and the South African Airways Pilots Association (Saaps), also called for an adjournment.
They said the “the BRPs [business rescue practitioners] could use this period to amend the plan to address the plan’s deficiencies, continue negotiations with stakeholders to satisfy the conditions, including consulting labour and creditors and to thereafter publish an amended plan that meets the requirements” of the Companies Act and has “fewer conditions and provides greater certainty for affected persons”.
The unions said an adjournment “will have no effect on the financial nor going concern status of SAA” and would also “allow creditors sufficient time to review and consider the amendments to the plan”.
The adjournment means that creditors will only vote on the business rescue plan on July 14. It also means that the July 15 deadline for the government to raise the necessary funding to implement the plan will also fall away.
The proposal received support from 69% of voters, which included banks, other creditors and certain unions.
Speaking afterwards, SA Airlink CEO Rodger Foster said it was an “equitable outcome”.
“We want the process to follow due process. All we want is for the correct processes and procedures to be followed and for fairness and equality to prevail,” he said.
Leading up to SA Airlink’s proposal, Foster said they had found the practitioners had a “high-handed approach” and that they were not compliant with the Companies Act.
“We [SA Airlink] had questions, other creditors had questions and they simply fobbed all those questions off.”
He said the practitioners were also supposed to give creditors a “schedule of voting interests”, but this was only delivered on Wednesday night at 9pm.
“We said to them, 'Shouldn’t this creditors meeting be adjourned? You [the BRPs] apply yourselves to the questions and answer the questions, and then we can give proper consideration to a vote - because otherwise you’re voting on vagueness.'
“How do you vote on unanswered questions? Some of the commercial parameters around this business rescue plan were implausible. We asked them to justify how they got to these numbers and they simply said they couldn’t because of business confidentiality, but it can’t be because it’s a business rescue plan they’re asking everyone to vote on.”
The practitioners said they communicated in the creditors' meeting “that all the affected parties were consulted numerous times on the plan”.
“Airlink was communicated with via meetings with the creditors committee and their responses sent to the creditors committee in writing. The questions from the creditors committee were exactly the same as the ones posed by Airlink in court papers,” they said.
“Obviously, the BRPs did not respond to the commercially sensitive information as Airlink is a competitor of SAA.”
In a statement on Thursday night, Numsa and Sacca said they were “very relieved that the adjournment was granted” and said the “inadequate plan by the BRPs would have resulted in SAA being liquidated”.
“Now that the vote has been postponed, we can work towards a sustainable plan to rectify the shortcomings of the business rescue plan. This period offers all stakeholders a golden opportunity for all of us to work together to improve on the plan, and work together towards a better plan, for the long-term sustainability of the airline,” they said.
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