The embattled SA Express has been placed under provisional liquidation by the Johannesburg High Court, making it the very first state-owned enterprise (SOE) to do so following failed business rescue.
SA Express Business Rescue Practitioners (BRPs) Phahlani Mkhombo and Daniel Terblanche, felt it necessary to launch an urgent court application on 25 March to “provisionally liquidate” the airline after their efforts to mitigate its financial losses proved futile. The Department of Public Works chose not to oppose the ruling, however, all parties will still have the opportunity to appeal the decision. A liquidation administrator will be appointed to oversee the process in the interim.
The Airline was placed under involuntary business rescue by the high court on 6 February 2020 and today its fate was sealed by means of a zoom conference call, due to lock-down restrictions preventing a court gathering. Judge Mpostoli Twala said in his judgment, that Mkhombo and Terblanche had satisfied the merits of having SA Express placed under provisional liquidation.
The government was requested to avail post-commencement funding of close to R700 million to afford the airline any hope of survival, this proved a bridge too far. Without that funding, the BRP’s would not be able to reach out to any commercial banks for further funding, thus sealing the fate of the Airline.
All relevant stakeholders will meet again June to conclude the final liquidation of the airline. Judge Twala encouraged all affected parties to put forward valid reasons why the court should not order the final liquidation of the airline before the June meeting.
Over 600 workers stand to lose their employment if no relief is forthcoming, as the airline will be forced to permanently cease operations and sell off the remainder of its assets. We at Flightline Weekly wish all the staff at SAX the best and hope you find alternative employment very soon.
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