SAA informs Solidarity that it would seek a strategic partner without delay
SAA Group CEO, Vuyana Jarana, has given a written undertaking to Solidarity to immediately initiate a process to procure a strategic partner. This comes after Solidarity announced plans earlier this year to embark on a process to have SAA placed under business rescue and to do so for the sake of taxpayers across the country.
This position is in stark contrast with SAA’s previous stance that the airline first needed to be turned around before a strategic partner could be procured.
“In view of the SAA’s letter in which comprehensive undertakings are given, Solidarity has decided to suspend its application for business rescue for the time being. It is difficult to immediately proceed with litigation if the other party has conceded in writing to most of our demands,” Solidarity Chief Executive Dirk Hermann said.
This written undertaking comes after talks between Solidarity and SAA about the trade union’s business rescue application.
Jarana confirms in the letter that the South African government announced that the private sector must participate in SAA’s ownership management. Jarana further writes that the shareholder, the SAA board and management agreed to, in view of the pressure to fund SAA, immediately proceed with the process.
SAA also undertook to liaise with Solidarity in a structured way regarding the project plan to find a strategic partner.
SAA confirmed to Solidarity it is desirable that further capitalisation of SAA must be done mainly by a strategic partner. The extent thereof is however not finalised yet.
According to Hermann, Solidarity’s application to finalise business rescue is ready to be served. It is a comprehensive application of more than 1 000 pages. Renowned South African and international aviation experts, such as Barry Parsons, Guy Leitch, Nico Bezuidenhout and Monwabisi Kalawe, are members of the Solidarity team. Business rescue practitioners who have already confirmed their availability also form part of the application.
The team was particularly involved in developing an alternative turnaround strategy for the SAA as part of the application. This strategy included comparative studies with foreign airlines that found themselves in similar circumstances.
“We are not naïve – the SAA’s written undertakings are sufficient to suspend the application. However, we are very sceptical about the implementation of these undertakings. We have confidence in Mr Jarana’s good intentions, and we will give him the benefit of the doubt for the present. However, we have less confidence in the shareholder’s political will to make radical decisions on private ownership of the SAA.
Solidarity therefore suspended the application for the time being. However, we will continue to act as watchdog. If it appears that the SAA does not honour its undertakings, or if the situation worsens, we’ll immediately continue with the application for business rescue. "The noose has therefore been loosened, but we have not removed it. Our documents for the application are ready to be served,” Hermann reaffirmed.
The SAA furthermore agreed to procure only the best skills and knowledge. An undertaking was also given that all allegations of improper action will be investigated on an expedited basis.
Statement issued by Dirk Hermann, Chief Executive: Solidarity, 10 July 2018