A vote on a restructuring plan for loss-making South African Airways (SAA) was delayed until next month on Thursday, after some creditors and trade unions secured an adjournment after months of wrangling over the airline’s future.
The administrators, who took over SAA in December after almost a decade of financial losses, published their restructuring plan last week and now expect the vote to take place on July 14.
The plan involves scaling back SAA’s fleet while keeping most routes intact but needs the government to find at least ZAR 10B (US$578M) of new funds to pay some creditors, fund thousands of layoffs and restart the airline as COVID-19 travel restrictions ease.
It is not clear where those funds will come from, after the finance minister allocated no new money for SAA in an emergency budget.
“The meeting is adjourned, and we believe it will be adjourned until July 14,” administrator Siviwe Dongwana told a creditor meeting after a 69%-31% vote in favour of the delay.
The NUMSA, SACCA and SAAPA unions argued the adjournment was necessary to correct what they said were deficiencies in the plan as well as for further negotiations.
Some creditors, including private airline Airlink which tried this week to block the meeting via the courts, argued the administrators had not complied with local companies law and had not provided creditors with key information.
The administrators said they had responded to the creditors’ concerns.
Even if SAA’s creditors approve the plan next month, it could still have to be reworked if the government does not come up with the necessary funding.
The state enterprises ministry has said there are investors interested in partnering with a restructured SAA but has given few details.