It seems that the Department of Public Enterprises is pinning its last hope of saving South African Airways (SAA) on local banks being willing to foot the bill and lend R10.5 billion to implement the business rescue plan and restructure the airline.
In a statement on Friday, the DPE said SAA will not be liquidated and that the restructuring process will be "closer to finalisation in the next few weeks". It says lending institutions will be "requested" to finance the restructuring process.
The DPE statement says government will "reprioritise funds" to restructure SAA and that the department continues to assess 20 unsolicited expressions of interest from the private sector funders, private equity investors and partners for a future restructured SAA. This is in line with what the DPE has been saying for months now. However, nothing concrete has as yet come to the fore.
The DPE said an announcement to this effect would be made on the Adjustments Appropriation Bill, to be introduced in Parliament soon.
Earlier on Friday the business rescue practitioners of SAA decided to give government another week to come up with the funding needed to implement the rescue plan and restructure the airline.
This came after government reconfirmed to the practitioners on Friday morning that Treasury supported the commitment to obtain R10.5 billion to SAA within timelines yet to be finalised. The rescue practitioners would, therefore, still have to engage with government to find out what timelines are proposed and how the funds will flow to SAA.
The business rescue practitioners said during a creditors' meeting on Friday morning that they were ready to propose to creditors that the state-owned airline be wound down or liquidated in terms of the Companies Act.
Creditors were told that to date no funding for the implementation of the rescue plan and restructure of the airline - already adopted a few months ago - had as yet been received from government. Last week government indicated it would pay over the money by 16 September, but this did not happen.
The existing funding has now been exhausted as well as all the ways the rescue practitioners have tried to prolong the rescue process.
The practitioners indicated during the meeting that, should the only two options that end up remaining indeed become a winding down or a liquidation, they would need time to do the necessary analysis to determine which of the two options will be better for the affected parties, including in terms of risks.
Creditors were told that numerous interactions between the rescue practitioners and government have made it clear that government remains committed to providing the funding to implement the plan and restructure the airline and is looking at various mechanisms to provide such funding.
No date was given for what "next week" meant, and the practitioners undertook to inform the creditors once they have more clarity.