JOHANNESBURG (Reuters) - A South African court placed state-owned SA Express under “provisional liquidation” on Tuesday after the airline’s administrators said rescue efforts weren’t likely to succeed.
SA Express, which flies to domestic and regional destinations, entered a form of bankruptcy protection earlier this year after losing a court battle with a contractor, logistics firm Ziegler.
It later suspended all operations as the global COVID-19 pandemic caused demand for flights to plunge and governments to impose travel restrictions.
The ruling in the Johannesburg High Court means affected parties can still give reasons why the airline shouldn’t be liquidated before a final order is made.
Public Enterprises Minister Pravin Gordhan said in a statement: “Government is reviewing its options in all airline assets.”
SA Express is a separate business to much larger state airline South African Airways, which is also under bankruptcy protection and fighting for its survival.
The pair have been a major drain on public resources in recent years, absorbing billions of rands of bailouts.
The public enterprises ministry said last month that the financial woes of SA Express were rooted in corruption and mismanagement under previous executives.
It rejected an initial request for funding from the airline’s business rescue team because it lacked a credible business case, it said. The rescue team did not respond to phone calls seeking comment.
Reporting by Alexander Winning; editing by Emelia Sithole-Matarise