SAA business rescue plan amended at urgent meeting
In a statement released on Friday, the business rescue practitioners (BRPs) for South African Airways (SAA) announced that 95% of the airline’s creditors with a voting interest, and 95% of its independent creditors (defined by the Companies Act) with a voting interest, had voted to accept proposed amendments to the business rescue plan during a virtual creditors' meeting. The other creditors either voted against the amendments or abstained.
The State-owned national flag carrier has been under business rescue since early December. The creditors meeting on Friday morning had been called on Thursday evening as a result of the failure of the government to fulfil an essential condition required for the implementation of the business rescue plan, namely the provision of a guarantee confirmation letter to the airline’s lenders.The BRPs consequently proposed that the SAA business rescue plan, specifically paragraph 42.2, be amended.
The amendment stated that, if all the conditions required by paragraph 42.1 (in practice, paragraph 42.1.6, which concerned the provision of a satisfactory guarantee confirmation letter by the government) were not met by July 27, then a creditors’ meeting would take place on July 30. The purpose of this meeting would be for the creditors “to consider amending the business rescue plan, failing which the BRPs would discharge the business rescue”.
In their Thursday release, the BRPs had expressed some optimism that a signed guarantee confirmation letter would be given to them before Friday’s meeting. This does not seem to have happened. “As advised at the meeting the outstanding condition to be fulfilled is in paragraph 42.1.6 of the Plan,” said the BRPs after the Friday meeting.
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