May 6, 2020 / 5:52 PM / 21 days ago

South Africa opposed to liquidation of national airline SAA - minister

CAPE TOWN (Reuters) - South Africa does not want a fire sale of the assets of troubled national airline SAA nor for the carrier to be liquidated, Public Enterprises Minister Pravin Gordhan said on Wednesday.

Gordhan told a parliamentary committee that the government was in talks with rescue specialists in charge of state-owned South African Airways (SAA) on how best to save the airline, which entered a form of bankruptcy protection in December.

“In our view, if this wind-down process the business practitioner team seem to be on at the moment continues as they proposed, it will not serve the original objective that we set for the business rescue process,” Gordhan said.

“That is also a matter of contention between the shareholder and the business rescue practitioners.”

Rescue specialists Les Matuson and Siviwe Dongwana said last month that SAA faced being wound down or liquidated as they had run out of funds.

Matuson and Dongwana said a wind-down process depended on staff accepting the termination of their employment, otherwise they would “have to make an urgent application for an order discontinuing the business rescue proceedings and placing SAA into liquidation.”

Gordhan reiterated that the government wanted to see SAA restructured into a new airline.

“We also want to indicate that there should be no fire sale of important assets of SAA, nor should there any movement towards liquidation when in fact there are many alternatives that can be pursued,” Gordhan said.

Two trade unions are seeking court action to try to block layoffs at SAA. The matter is expected to be heard on Thursday.

SAA has not been profitable since 2011 and has received more than 20 billion rand ($1.07 billion) in bailouts in the past three years, a drain on public resources at a time of weak economic growth.

The fortunes of SAA have deteriorated further with the COVID-19 pandemic which has forced airlines to suspend all commercial flights following a government imposed nationwide lockdown.

Reporting by Wendell Roelf; Writing by Olivia Kumwenda-Mtambo; Editing by Kirsten Donovan

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