THE Department of Public Enterprise has announced its intention to oppose a court application brought by SA Airlink against the South African Airways Business Rescue Plan, which is due to be voted on by creditors this week.

“The Department of Public Enterprises (DPE) was notified of a court application by SA Airlink aimed at interdicting the Business Rescue Practitioners (BRPs) from convening a Creditors meeting to vote on a business rescue plan for South African Airways (SAA),” the department said in a statement released on Monday.

The department says the application by SA Airlink also seeks to have SAA placed under provisional liquidation.

“The department is also aware of plans by the National Union of Metalworkers of South Africa (NUMSA) and the South African Airways Cabin Crew Association (SACCA) to interdict the Creditor’s meeting through the courts,” the department said.

The unions could not be reached for comment.

Business Rescue Practitioners Siviwe Dongwana and Les Matuson published the Business Rescue Plan last week and it is set to be voted on by creditors on Thursday.

Among the reason that they cited as having business rescue instead of liquidation is that business rescue will result in a fewer retrenchments while those who will be retrenched will fare much better and creditors are likely recover a higher proportion of what they are owed.

The department says although it is not cited as a respondent it will intervene in its capacity as a sole shareholder representative in SAA. The department says it will also oppose SA Airlink’s application for liquidation SA Airlink contends that there is no reasonable prospect of rescuing SAA.  Government will also oppose any move by unions to block Thursday’s crucial creditors meeting.

“As we approach the final week to either endorse or reject the business rescue plan by the BRPs, it is disturbing that a competitor of SAA, which is 100% privately owned, as well as two labour unions, who should be acting in the best interest of their members, are seeking to destroy SAA by forcing a liquidation through the courts. The question is why? Is this really in the interest of SAA workers or the fiscus?” the department said.

SA Airlink is a privately owned regional airline that connects small towns to major airport hum.

From OR Tambo International Airport it runs services to places like Cape Town, Bloemfontein and a soon to be resumed service to Nelspruit.

A liquidation of SAA would likely result in a cheaper and quicker sale of some of its assets as well as potential new or more lucrative routes for Airlink.

DPE reiterated its stance that it “….supports the business rescue plan where it results in a viable, sustainable, competitive airline that provides integrated domestic, regional and international flight services.”

(Compiled by Inside Politics staff)


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