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SA Express owes creditors a staggering R2.7 billion – and the figure keeps growing every day, the troubled airline’s business rescue practitioner, Daniel Terblanche, has revealed.
Addressing an emotionally charged creditors’ meeting at the Killarney Country Club in Johannesburg on Saturday, Terblanche said the figure was not final as his office was receiving more claims from creditors every day.
“The total claims amount to R2.7 billion, the company’s assets stand at about R1.9 billion, while the net liability is sitting at R747 million. But the figures change every day,” he said.
The airline’s creditors include Nordic Aviation Capital, Rand Merchant Bank, Flyfofa Airways, Transnet, Mthatha Airport and Airports Company SA.
A creditor who attended the meeting told City Press that the airline’s biggest creditor is Rand Merchant Bank, which is reportedly owed R600 million. A representative, who had attended the meeting on behalf of the bank refused to comment.
The airline owes Transnet about R220 million, while Flyfofa Airways, from which SA Express had leased a number of aircraft, is owed R46 million.
Terblanche said SA Express owed the SA Revenue Service more than R140 million.
A man who had attended the meeting on behalf of Mthatha Airport said the airline owed the airport close to R2 million.
“We were considering banning them from landing at our airport, but the problem is that we have the same shareholder,” he said.
“It would look a bit awkward for companies with the same shareholder to deal with each other in that fashion.”
Transnet reportedly loaned SA Express the R220 million in 2017.
Steve Harris, general secretary of the United National Transport Union, said: “Transnet should not have loaned the money to SA Express. It is unheard of for a state-owned company to give a loan to another state-owned company. From what we can gather, the loan has not been repaid. It looks like Transnet will have to write it off eventually.”
Read: More trouble for ailing SA Express
Transnet was also represented at the meeting.
Jacky Fisha, chief executive of Flyfofa, said the airline’s inability to pay its debt has affected the company negatively.
“We were servicing them very well and they were paying,” said Fisha. “As time went on, they started to slow down on the payments. But we never thought we would get to this point where we are owed such a lot of money, because there were instances where we were supposed to just ground the aircraft and not provide the service, but we just thought: ‘It is a state-owned enterprise and they will be able to pay.’”
She said her company had not been able to pay other service providers as a result.
“We just hope this process will assist us because we also have to pay our own suppliers. We are a small company, trying to grow. We also owe suppliers. R46 million is a lot of money, and it doesn’t mean that all of it will come directly to us. We have to pass it on to other people.”
When asked whether he had received offers from companies interested in buying the airline, Terblanche said: “We have not received offers, but we have had substantial discussions with interested parties. We cannot consider any offers at the moment because we have not had discussions with the shareholder about the model to follow in solving the problems here.
“If they [potential buyers] do not know what model we are following, they would not know what offers to make. The three models that the department of public enterprises will consider include keeping the airline as is, bringing on an equity partner or disposing of the company. We do not know which model will be followed,” said Terblanche, adding that he hoped to publish the business rescue plan by April 30, after the public enterprises department had decided what to do with the troubled airline.
An angry shareholder, who did not want to be named, tabled a motion that the airline’s board and the entire executive management be axed.
“SA Express has become an airline filled with actors and not aviators, from the acting chief executive to the acting chief financial officer, and it keeps changing.
“There is delinquency against the board members and against the directors. There are irregularities within SA Express. When creditors begin to take SA Express to court, it has become a norm for SA Express to start accusing creditors of irregularities and start hiding behind noncompliance with the Public Finance Management Act.
“That only comes down to one thing: pure incompetence of the board and its management. The board does not know what it is doing.
“My recommendation is that the entire board is tainted, the whole management is tainted; there is incompetence all the way to the company secretary.
“I suggest that you [Terblanche] engage the department of public enterprises, suspend or fire the entire board and management of SA Express, and reconstitute a new board with the help of the department.”
Terblanche said he did not have powers to fire the board.
Meanwhile, the airline last week announced the sale of four jet engines and spare parts.
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