SA Express’ business rescue practitioners are moving to liquidate the state-owned airline after they failed to secure state or other funding to keep it afloat.
Salaries are likely not be paid on time – or not at all – due to the lack of funding, the practitioners said.
SA Express, which suspended all its flights on Wednesday, March 18, 2020 was placed in involuntary business rescue in February.
In a letter to all employees, business rescue practitioners Phahlani Mkhombo and Daniel Terblanche said that, without additional funding from the state, business rescue at the airline will not succeed.
Challenges at the airline have been exacerbated by the recent spread of the novel coronavirus, the practitioners said.
“We have [therefore]come to the conclusion that, a reasonable prospect to rescue the company no longer exists, and consequently, we will begin a process to convert the current business rescue proceedings of the SA Express into liquidation… with immediate effect,” the letter to employees read.
Aside from an inability to pay salaries, the business rescue practitioners said the airline has also not been able to make contributions to the provident fund, pension fund, income protection, UIF and PAYE of employees since February.
Various discussions with the department of public enterprises had, apparently, not led to securing the necessary funding.
If the state is able to secure funding before the liquidation application is heard in court, the application will be withdrawn, the practitioners said.
The department of public enterprises has long been accused of frustrating the business rescue processes at the airline, and instead opted to develop their own business rescue plan, Daily Maverick reported.