There was little to point out for the R5.5bn that was awarded to the SAA enterprise rescue practitioners since December 2019, mentioned public enterprises minister Pravin Gordhan. A number of consultancy corporations had been employed by the rescue practitioners. However there isn’t any proof of the work that the corporations had performed to restructure the affairs of SAA.
The restructuring means of SAA by the enterprise rescue practitioners over the previous 5 months has come below intense criticism by the federal government, which has questioned how the R5.5-billion that the troubled airline just lately obtained was spent.
Though the enterprise rescue practitioners, Les Matuson and Siviwe Dongwana, have been awarded R5.5-billion to fund SAA’s working capital necessities whereas it was being restructured, there was little to point out for a way the cash was spent or any profit derived by SAA.
Since SAA was positioned below enterprise rescue in December 2019, the rescue practitioners obtained R2-billion from business banks and R3.5-billion from the Growth Financial institution of Southern Africa – a complete of R5.5-billion.
Public enterprises minister Pravin Gordhan mentioned Matuson and Dongwana haven’t accounted for a way the cash was spent – contemplating that enterprise rescue proceedings have been ongoing for 5 months and haven’t but yielded a agency resolution about SAA’s destiny. Such proceedings ought to ideally final for 3 months.
Matuson and Dongwana have requested for a number of extensions within the deadline to desk the ultimate enterprise rescue plan. The plan is now anticipated to be printed on 29 Could. Even with extensions to the deadline, Gordhan mentioned the rescue practitioners haven’t produced a agency enterprise rescue plan however “a top level view”, which has detailed SAA’s historical past and “not an excessive amount of concerning the future” of the airline.
Charges paid to consultancy corporations
Gordhan was briefing parliament’s joint committee on public enterprises on Wednesday 6 Could night concerning the affairs of state-owned entities together with SAA.
He mentioned a number of consultancy corporations had been employed by Matuson and Dongwana to advise on the enterprise rescue course of. However there isn’t any proof of the particular work that the corporations had performed to restructure SAA’s affairs.
Gordhan mentioned massive quantities of cash have been paid to consultancy corporations from the R5.5-billion, together with R35-million to US-based consultants Alvarez & Marsal (A&M), whose work on SAA he has by no means seen.
A&M was employed by the rescue practitioners to develop eventualities on the way to restructure SAA corresponding to slicing unprofitable lengthy haul and regional flight routes and utilizing SAA’s subsidiary, Mango Airways, as the principle mechanism by which the airline will solely function home flight routes. Matuson and Dongwana additionally employed audit agency PwC to price the enterprise rescue eventualities. Enterprise Maverick was additionally knowledgeable that the duo is backed by a “huge” authorized crew, which is led by ENSafrica.
A number of the corporations employed by the rescue practitioners have been requested by Gordhan to cut back their service charges by as much as 40% however “we’ve got not heard from them on this regard.” Gordhan mentioned there will likely be a assessment of how the R5.5-billion was utilized by the rescue practitioners, whom he believes had “sole discretion” to restructure SAA because it was positioned below enterprise rescue.
Gordhan needs the enterprise rescue course of to result in a brand new nationwide airline being created on the ruins of SAA. The brand new airline gained’t be absolutely state-owned as strategic fairness companions will likely be launched and can function utilizing SAA’s property together with the fleet of planes.
Particulars of the brand new airline, which will likely be launched at a time when the worldwide airline trade is imploding as a result of Covid-19 pandemic, are “nonetheless being labored at”. To launch the brand new airline, Gordhan is concentrating on the consolidation of SA’s airline trade to incorporate non-public airline operator Comair, which voluntarily submitted itself for enterprise rescue this week.
Gordhan gained’t permit a fireplace sale of SAA property or any transfer in direction of the airline’s liquidation. It will pit him in opposition to the rescue practitioners as they’ve proposed the sale of corresponding to property (together with buildings in Gauteng, Cape City, Port Elizabeth, and East London) and plane components (corresponding to touchdown gears and engines). The proceeds from the sale would fund the cost of retrenchment packages to about 5,000 employees. BM