Satawu slams Pravin Gordhan’s DPE over no-show at SA Express hearing

CAPE TOWN – The South African Transport and Allied Workers’ Union (Satawu) slammed Minister Pravin Gordhan’s Department of Public Enterprises (DPE) for its hands-off approach towards SA Express, which has been placed under business rescue.

Despite being listed as a respondent, along with the Department of Finance, sole shareholder DPE did not appear in court to help SA Express fight the business rescue application.

The state-owned airline was placed under business rescue by an order of the high court on February 6 following an application by one of its creditors, Ziegler SA.

On Thursday, the court-appointed business rescue practitioners (BRPs), Phahlani Mkhombo and Daniel Terblanche, held their first meeting with creditors and affected persons. Their appointment was ratified via ballot by the meeting, according to a statement released on Friday by Satawu’s media officer, Zanele Sabela.

“The BRPs informed the gathering that although they had held several meetings with representatives of the DPE, they were yet to meet with decision-makers at the department. Of critical importance were the funds required to expedite the business rescue.

“Whereas money was allocated to rescue SAA, no funds have been set aside in SA Express’s instance, mainly because it was involuntary. The BRP has already indicated to DPE that R350 million would be required to save the airline. But to date they have had no response,” said Satawu.

The DPE confirmed that Mkhombo and Terblanche were engaged as BRPs. It said the business rescue process was not voluntary but a result of the legal action undertaken by a service provider, which SA Express contended had been engaged irregularly by the previous management of the airline.

Deputy Minister of Public Enterprises Phumulo Masualle said he was of the view that there was still a commercial case for SA Express that could play a critical role as a feeder airline to service secondary routes and key cities in southern Africa.

SA Express said after the February 6 court decision that despite a plethora of well-known historical challenges its board and executive team had made progress to ensure the airline’s long-term sustainability.

“While the manner in which the introduction of the business rescue process occurred is unfortunate, this now provides the environment to facilitate the conclusion of initiatives that had already been initiated by the board and executive team.”

Masualle said the department shared concerns about the prospects of job losses at the regional feeder with Satawu due to the business rescue process.

“The department had tasked the board to seek a strategic equity partner to provide working capital in December 2019 due to continued funding requirements at the airline. This, despite a government injection of R1.5 billion into the airline in the last two years. The business rescue process interrupted the board process to seek a lifeline,” he said.

Masualle said the key issue in the business rescue process that needed to be resolved was the provision of the post commencement finance (PCF) for the airline to enable continued operations. He said the department was hopeful that the BRP will be able to raise the PCF.

The BRPs said they had presented three options to the DPE, which would determine the BRPs’ next move. But the opportunity was now, Terblanche told creditors.

Satawu appealed to DPE to act now. “Let the appropriately mandated officials meet with the BRP as a matter of urgency, and make the requisite funds (cash or guarantee) available as soon as possible so BRP can save the airline.”

SA Express is a separate business to embattled state carrier SAA, which entered business rescue in December.

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117065352 - Satawu slams Pravin Gordhan's DPE over no-show at SA Express hearing
113134169 - Satawu slams Pravin Gordhan's DPE over no-show at SA Express hearing
113134169 - Satawu slams Pravin Gordhan's DPE over no-show at SA Express hearing
113134169 - Satawu slams Pravin Gordhan's DPE over no-show at SA Express hearing

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