DA rejects Public Enterprises urging creditors to back obscene business rescue plan

24 June 2020

The Democratic Alliance (DA) notes with concern the statement issued by the Department of Public Enterprises that urges creditors, employees and other South African Airways (SAA) stakeholders to vote in favour of the business rescue plan drafted by the SAA Business Rescue Practitioners (BRPs), Les Matuson and SiviweDongwana. This plan requires funding of R23 billion in the current 2020/21 financial year and a total of R33 billion over the next three years.

There can be only one conclusion drawn from the DPE statement and that is that an additional R6.7 billion taxpayer bailout for SAA has been agreed to and may be announced in the Covid-19 emergency budget to be tabled by the Minister of Finance, Tito Mboweni, in Parliament this afternoon.

Given that the dividends payable to creditors and employees if SAA were to be liquidated are likely to be very low or nothing at all, there is indeed a danger that creditors who prove their claims in a liquidation process, might even find themselves having to make a contribution towards the costs of liquidation. 

There is very little chance that the SAA creditors and employees will not vote in favour of the proposed business rescue plan. 

They will likely have no compunction about voting for a plan that will in all likelihood cost poor and destitute South Africans who, because of the Covid-19 lockdown crisis, are battling to feed their families and may well result in the malnutrition deaths of many of these destitute South Africans.

South Africa does not need the ANC SAA vanity project and the DA will robustly oppose by every legal means possible any further bailouts to SAA.

Issued by Alf Lees,DA Member of the Standing Committee on Public Accounts, 24 June 2020