Dear Cape Town
We are witness, in the post-ANC Lekgotla comments, to the usual raft of contradictory statements and half-measures that aim to fix the unfixable.
Now the government, in response to the three scenarios presented by the SAA Business
Rescue Team has opted to restructure and retain the failed national airline.
Section 150 of the Companies Act requires that the business rescue plan be published by the company within twenty five days after the date on which the business rescue practitioner was appointed.
It does not call for options to be presented to the shareholder.
In terms of section 140 of the Act, the business rescue practitioner has full management and control over the company and is required to “provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders”.
While there has been a move away from a culture of liquidation to a culture of rescue, in that if a company is not able to be restored to a position of solvency, then the next best option is for it to at least achieve a better result for the creditors than would arise from liquidation.
If a business rescue plan is rejected the practitioner may seek a vote of approval from the holders of voting interests to prepare and publish a revised plan or advise the meeting that the company will apply to the court to set aside the result of the vote on the grounds that it was inappropriate.
What government, however, has resolved to do and the manner in which Business Rescue has been carried out thus far represents, yet again the heavy hand of political interference that seeks to retain the vanity of a national airline regardless of the cost.
No real plan appears to have been generated and government is now calling the shots.
The trouble is the additional R2bn needed to pay salaries and keep the flag flying is not available and Treasury has to wait for the budget to be tabled in February and the new appropriation bill passed.
Instead of embarking on a road to more folly at the taxpayer’s expense, the Democratic Alliance (DA) has proposed unbundling of the SAA group, the sale of parts with potential and shutdown of those parts that have no future is required in terms of which the following should take place:
- Mango separated from the SAA Group and offered for sale preferably by way of a public offer and listing.
- Mango to take over SAA domestic routes that are profitable.
- Remaining SAA with international routes to be offered for sale.
- SA Express to be shut down and Mango to take over profitable domestic routes if any exist.
- Air Chefs Catering to be shutdown.
- SAA Technical, given the levels of fraud and corruption, to be shut down.
Government needs to understand that if SAA survives it must be as a private enterprise, but the signals from the Lekgotla tell a different story, which is essentially more of the same – throwing good money after bad.
This practice has to end and the continued madness of bailouts to appease political interests, patronage and unaffordable vanities must cease immediately.
Regards
Ghaleb Cachalia MP
DA Shadow Minister of Public Enterprises
Dudu tries another delay