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According to the administrators of South African Airways (SAA), plans to resuscitate the airline will now proceed. They say that the conditions for business rescue have been met. But, as reported by Bloomberg on Monday, administrators wanted an agreement for a staggering R16.4bn to be paid into an escrow account. The money would be a safety net for creditors to guarantee payment if the airline were to fail. Still, on Tuesday, administrators did not state whether the government had met such demand, despite the approved way forward for the failed airline. The announcement means that the airline will avoid liquidation, however, its workforce will be reduced to 1,000 employees from 4,700. Below is the brief stating all conditions were met and that the strategy to save SAA, an airline which has failed to make a profit since 2011, is ready to be implemented. Reuters reports that it is not clear where the R10bn needed to make the plan work will come from. – Nadim Nyker
Notice to all affected parties of fulfilment of all the conditions precedent of the business rescue plan of the company
1. On 24 July 2020 at 10h00 a meeting of creditors and other holders of a voting interest, as contemplated in terms of paragraph 42.2 of the adopted business rescue plan (“the Plan”), was held in respect of the Company (“the Meeting”).
2. At the Meeting pursuant to the approval of the amendment to paragraph 42.2 of the Plan by the majority of affected persons, paragraph 42.2 of the Plan was changed as follows:
“Should the conditions set out in paragraph 42.1 not be fulfilled by 27 July 2020, the Business Rescue Plan will be deemed unimplementable and a meeting of Creditors will be convened on 30 July 2020 for Creditors to consider amending the Business Rescue Plan, failing which for the BRPs to discharge the Business Rescue. Such meeting will be convened in terms of section 151 of the Companies Act.”
3. Please note that all the conditions set out in paragraph 42.1 were fulfilled on or before 27 July 2020.
The BRPS noted, “We are currently attending to and finalising the remaining outstanding administrative issues before filing a notice of substantial implementation in terms of section 152 (8) of the Companies Act 71 of 2008, as amended.”
4. There will be no meeting on 30 July 2020 and the Plan has become unconditional and has come into operation.
5. Should you have any queries regarding the above, please do not hesitate to contact the BRPs at [email protected]<mailto:[email protected]>.
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