Photo Credit: Airliners
Rescue practitioners of struggling South African Airways (SAA) have been given 25 to produce a formal business plan.
That was after a Parliamentary standing committee on public accounts expressed gross dissatisfaction with a draft publication.
The committee further seeking a full schedule of fees from the practitioners, their advisers, and others involved in the five-month effort to rescue SAA.
SAA has been hard-hit by the coronavirus pandemic, with its finances dwindling.
Chairman of the Standing Committee, Mkhuleko Hlengwa, hosting a 15 May session over video, says there was a need for “more interaction” with the practitioners.
“The more they provide answers, the more questions arise,” he said. “It’s a case of classical musical chairs. It’s what has characterised the operation over the past five months. It’s what has landed us with a R10 billion bill.”
which has become mired in political controversy.
Committee chairman Mkhuleko Hlengwa – hosting a 15 May session over video link, made difficult by technical issues – said there was a need for “more interaction” with the practitioners.
“The more they provide answers, the more questions arise,” he said. “It’s a case of classical musical chairs. It’s what has characterised the operation over the past five months. It’s what has landed us with a R10 billion bill.”
Accordingly, members of the Committee are expected to compile a list of questions to put to the practitioners.
A May 26, 2020 deadline has been set for responses.
The committee was provided with a draft rescue plan but says the “late submission” meant the members “could not engage” with it, and the practitioners have been given 25 days to produce a formal plan.
However, practitioner Les Matuson has acknowledged the committee’s remarks, telling its members that his team would “accelerate production of the business rescue plan”.
SAA Group’s draft full-year accounts to 31 March 2019, presented during the session, showed the company made a pre-tax loss of R5.09 billion ($274 million), on revenues of R27 billion. Its total liabilities of R27.4 billion were nearly twice its total assets, reports FlightGlobal.
Accordingly, in a cash-flow diagram the practitioners showed the company had opening cash of R118 million when it entered business rescue, eight months later, on 5 December.
Reports says this was supplemented by a R5.5 billion drawdown in post-commencement funding, as well as R5.3 billion in receipts plus around R280 million in VAT and charter revenues.
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