DPE delivered the news about 3 weeks ago, that they felt confident about resurrecting SAA. The news that the government intended to pour more money into the airline upset a lot of people. Especially, considering the massive hit to the South African economy due to COVID-19 restrictions.
DPE updates on the SAA Business Rescue Plan
We reported that SARS lost more revenue over the last few months than both the gigantic COVID-19 loans the government secured. People fear that reinventing the SAA only brings more debt to the government. Not to mention, more hardship for taxpayers. Nevertheless, the government determined that they could revamp the airline. They suggested both local and international investors express their interest. Now, the DPE says that the new SAA business Rescue Plan brings a “professional and sustainable airline to the Country.”
Professional and sustainable airline
DPE pointed out in a statement on August 12, that the way forward includes four targets. These include:
- Appointing a management board
- Appointing a transaction advisor, and
- The creation of viable and sustainable national airline.
Restructuring involves placing around 1,000 employees on a “Social Plan.” It’s described as “a temporary training lay-off scheme.” The others take “voluntary retrenchment.” Any returning employees come back in under revised working conditions.
New management team and board
The DPE noted that they remain a shareholder on behalf of the government.” They intend downsizing on the board of directors and the management team. Described as “smaller, effective, reinforced, and empowered,” the board then appoints new “executive management.”
Compiling the executive management team involves the appointment of a “chief risk officer, chief information officer and chief operating officer.”
Advisors and investment for SAA
Still arguing for the interest by international and local investors, the DPE statement notes they appoint a special Transaction Advisor. Apparently, that function includes “raising funds and investments for the new airline.” Hopeful that “unsolicited” interest might arise, the advisors will “assess” those “unsolicited expressions of interests from private sector funders.” That also extends to “private equity investors and partners for a future restructured SAA.”
At this time, it remains unclear who the international investors might be. And, if they actually acquired them yet. However, the DPE feels confident that if this all comes together, they end up with a viable SAA.
New SAA a competitive, viable and sustainable national airline
Certainly, the aims and objectives seem an ideal solution if it all comes together as planned. In fact, the DPE expresses their aim is for “a competitive, viable and sustainable national airline.” However, some skepticism remains among the public. One person on Twitter commented, “Don’t be sad or cross… We will soon have a new #SAAthanks to the benevolent #ANC.”
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