Tag: business rescue

SAA takes off again on 23 September

Source: EWN

South Africa Airways (SAA) announced on Twitter that they would be back in action from 23 September 2021.

“The wait is finally over. In just under a month, the striking and familiar livery of SAA will once again be visible in the skies as the airline resumes operations. The carrier has confirmed the first flights will commence on Thursday, 23 of September 2021,” it said in a Twitter statement on Wednesday.

“After months of diligent work, we are delighted that SAA is resuming service, and we look forward to welcoming onboard our loyal passengers and flying the South African flag. We continue to be a safe carrier and adhering to COVID-19 protocols” said Interim CEO Thomas Kgokolo.

The airline said they would start operating flights from Johannesburg to Cape Town, Accra, Kinshasa, Harare, Lusaka and Maputo.

“Voyager bookings and Travel Credit Voucher redemption will be available from Monday, 6 September 2021,” the airline said, adding that it would would add more routes with time depending on the market.

“There is a profound feeling of enthusiasm within Team SAA as we prepare for takeoff, with one common purpose – to rebuild and sustain a profitable airline that once again takes a leadership role among local, continental, and international airlines,” said Kgokolo.

“The aviation sector is currently going through a testing period, and we are aware of the tough challenges that lie ahead in the coming weeks. We thank South Africa for the support we have received in getting us to where we are today. As we are now poised for takeoff, we see this as a major milestone for SAA and the country,” he continued.

South Africa’s national airline had its wings clipped and was grounded last year in March. It hasn’t flown as it was under business rescue.

In April, Kgokolo told MPs that should things go according to plan, without any disruptions from pilots and the COVID-19 pandemic, the airline would be back in the sky soon.

 

Source: MyBroadband

SAA interim chief executive Thomas Kgokolo said Mango Airlines, the low-cost arm of state-owned South African Airways (SAA), will be placed into business rescue.

Mango Airlines, trading as Mango, is based at OR Tambo International Airport and is a whole-owned subsidiary of SAA.

Mango was launched in October 2006, and the first commercial flight took place on 15 November 2006.

The airline has a fleet of new generation Boeing 737-800 aircraft, which boast a seating capacity of 186.

Mango Airlines faced financial challenges and was grounded due to non-payments and debt to Airports Company of South Africa (Acsa). No Mango planes were allowed to depart or land at any Acsa airport.

Kgokolo has now revealed that the Mango board and the government will place the company in business rescue. Consultation with labour groups was underway.

Speaking to ENCA, Kgokolo said some Mango staff were still awaiting delayed salaries. This problem should be addressed in the coming weeks as part of a R2.7 billion bailout given to SAA subsidiaries.

SAA exited business rescue in April after a lengthy process that reduced its workforce by almost 80%.

The national carrier has been unprofitable for almost a decade, surviving on state bailouts and government debt guarantees. It was placed under administration a year ago.

The airline exited administration after receiving R7.8 billion from the government.

SAA has not yet committed a firm date to recommence operations, promising an announcement in the coming weeks.

Last month, the government announced it would sell a majority stake to a consortium in the country’s grounded national carrier.

The consortium comprised Johannesburg-based Global Airways and private-equity firm Harith General Partners.

They will take a 51% shareholding in South African Airways, and the government will retain a minority stake.

The grouping named Takatso will invest around R3.5 billion rand over the next three years in SAA, Harith CEO Tshepo Mahloele said.

“Government will have no further financial obligations to the company, outside of the existing liabilities that they will settle,” Global Airways’ Gidon Novick said.

“Route networks we are still working on, and it will be a phased rollout based on demand re-emerging post-Covid.”

 

CNA placed in business rescue

Source: News24

The 125-year-old stationery retailer CNA has been placed in business rescue, its management team confirmed on Tuesday.

Business rescue means that a company gets breathing space from debt and other repayments, while business rescue practitioners take full management control. They then decide whether the business can be restructured to survive. Failing that, they would aim to achieve a better return for the company’s creditors and shareholders than an immediate liquidation of the company would.

Fin24 previously reported that CNA is behind on payments to suppliers and landlords. The retailer has been hard-hit by the Covid-19 pandemic, which kept customers out of the country’s big malls, and its stores.

One of its suppliers is Jonathan Ball Publishers, and its CEO, Eugene Ashton, told Fin24 that he believes going into business rescue will be a positive development for CNA.

“It will at least give them a chance to try rectify things. It was always going to be difficult taking over the business during the Covid-19 pandemic,” Ashton said.

“Business rescue is a logical consequence, and I am sure suppliers will work with them [CNA] to try [to] see if they can take themselves out of this situation. This is the right course of action and probably the best one too, for suppliers. There is no point in liquidating the business now because there are no material assets.”

Tashya Giyapersad and Simi Maharaj have been appointed as CNA’s business rescue practitioners, a director of the retailer confirmed.

CNA’s former owner Edcon was placed in business rescue in April last year, with all of its assets eventually sold off. Edcon sold CNA to an investment group, Astoria, with Exclusive Books’ former CEO Benjamin Trisk also taking a 30% stake. Astoria sold its 70% stake back to management last month.

Trisk is currently at war with the CNA board. Directors accused Trisk of contacting business rescue practitioners without their consent and then announced that he had resigned in April – which Trisk disputed.

CNA boots Trisk out

Struggling stationery group CNA has removed Benjamin Trisk as a director from its operations after a meeting on Monday, according to a statement from the company’s former CEO.

The management team at CNA allegedly tabled a resolution to remove Trisk as director of CNA operations, which Trisk has labelled as “preposterous” and “spurious”.

Trisk claims he will go to court.

JSE-listed investment group Astoria previously sold its 70% interest to the rest of the management team, including CNA operations director Rob Shortt, CFO Nazir Patel and director of procurement Olinka Nell.

Astoria purchased CNA from Edcon in February last year for R1 and subsequently contributed further capital to pay for transaction costs.

Trisk, who holds the remaining 30% of CNA, said he and his legal team believed the share purchase from Astoria by the rest of the management team was “unlawful” and carried consequences for any funding the group was trying to negotiate.

The group, whose landlords and suppliers have experienced delays in payments from the stationer, has openly said it is facing major financial problems. It also says its problems were worsened by the shadow cast by the legal battle between Trisk and his former employer, Exclusive Books, which became public knowledge six weeks ago.

After CNA received negative feedback about this from funders and creditors, members of its management team held a meeting with Trisk on April 19, where they say he offered to resign. CNA has told him it has accepted his resignation from that date. ​Trisk has denied these claims.

CNA battles business rescue, CEO

Stationery retailer CNA is facing a financial crisis, with its board threatening legal action against its controversial CEO and creditors claiming they have not been paid for months.

After only a year at the helm, investment company Astoria announced last week that it sold its stake in CNA Holdings to management.

Astoria had purchased 70% of CNA from Edcon for R1.2-million from Edcon. It said it did not provide any “further equity or debt funding” to CNA.

A director of Astoria told Fin24 that they sold because they “were not able to add any value and the management team thought they could”.

The sale agreement was amicable.

However, the board of CNA is now accusing CEO Benjamin Trisk, formerly of Exclusive Books, of attempting to put the company in business rescue without consulting them, alleging that he submitted documents that show the board agreed to business rescue when they had not.

According to an article in Fin24, Trisk has refuted this claim as “complete rubbish”.

In addition, CNA director Rob Shortt and Trisk have both confirmed that CNA has fallen behind on payments to landlords and suppliers.

Creditors say they are in the dark as CNA battles to avoid business rescue, with one creditor has still not been paid for January purchases. A payment plan proposed by the retailer saw terms of 60 days effectively change to 120 days, subject to cash flow.

Last week, CNA contacted creditors to state that the proposed payment plan would be amended further with part payment now likely at the end of the month. The letter stated that the retailer needed time to put funding in place.

CNA’s stores are not as well stocked as they should be, which may point to the fact that suppliers are no longer providing stock until payments are received.

In the event that CNA does enter business rescue, it is likely that creditors will only receive 4c on the rand.

SA’s Wonderbra, Playtex maker goes bust

Source: Business Insider SA

The South African manufacturer and licence holder of the Wonderbra and Playtex brands has filed for provisional liquidation.
More than 700 jobs are under threat.

Netwerk24 reports that Hanes has applied for voluntary liquidation.

The Durban-based company has the licence to manufacture Playtex and Wonderbra in South Africa and other African countries.

A Hanes spokesperson told Netwerk24 that there is currently no plan to appoint an alternative distributor for the products in South Africa.

This means that South Africans may not have access to Wonderbra and Playtex products in future. The Wonderbra online store has already stopped taking orders in South Africa.

Hanes blamed the weak local economy, worsened by the pandemic, as well as the business rescue process of a “big client” for its demise. Netwerk24 believes that this can only refer to Edgars, and the Hanes spokesperson confirmed that Edcon owes it money for stock that has been supplied.

Edcon’s brands – including Edgars and Jet – were sold off last year, as part of its winding up after doing business in SA for more than 90 years. The company was forced to near-collapse under a debt burden of billions.

The Hanes factory in Durban employs more than 700 people. IOL reports that the workers received their last salary in mid-January, and that they have not been able to work since then.

 

Ster-Kinekor enters business rescue

By Ray White for EWN

Movie outlet Ster-Kinekor has been placed under voluntary business rescue.

In a statement on Friday evening, the company said the business rescue was aimed at facilitating the rehabilitation of the company.

It said up until February 2020, Ster-Kinekor welcomed millions of movie goers every year to their cinemas.

But due to various factors brought on by the COVID-19 pandemic, Ster-Kinekor has been trading at a loss, as the company continues to incur costs.

“As a result of the COVID-19 pandemic and the consequent economic lockdown instituted by the South African government at the end of March 2020, all cinemas were required to shut down, and only permitted to reopen under strict conditions as from the end of August 2020.

“Since then, the company has been operating under various forms of restriction, including curfews and mandatory limits to the number of guests per auditorium,” the statement read.

It also said the continued lack of content for the next four to five months meant that the business was heading for further operational and cash flow challenges.

“The board is of the view that the safe harbour that business rescue provides, in terms of providing a legal moratorium, will assist the business to return to profitability, once operating restrictions have been lifted, when international film distributions start to flow again.”

However, cinemas will remain open to the public.

Acting CEO Motheo Matsau said: ““For our customers, it is important to note that our cinemas remain open for business. All cinemas have instituted strict COVID-19 protocols, which mean temperature checks and hand sanitising on arrival and inside the auditoria and mask wearing as appropriate. Every two seats are kept vacant for social distancing.”

 

Edcon saves over 5 000 jobs

Edcon has announced that the sale of parts of the Edgars business in South Africa to Retailability (Pty) Ltd has been implemented, with all approvals from regulatory authorities and all conditions precedent either fulfilled or waived.

The sale includes the transfer of approximately 120 stores in South Africa together with the businesses conducted therein.

Retailability, a fashion retailer and a holding company of store brands including Legit, Beaver Canoe and Style, operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.

Retailability aims to ensure that ongoing operational business is its top priority, while integration work is moving ahead vigorously.

“We are pleased that we were able to close the transaction within two (2) months after the announcement. The closure of the transaction underlines the industry fit and the excellent compatibility between Edgars and Retailability’s strategic intent, infrastructure, and value chain. We are pleased by the significant saving of approximately 5,200 jobs as well as the continued commitment to the retail industry, economy, and the sustainability of the South African Edgars brand,” said business rescue practitioners.

The finalisation of the sale in South Africa indicates the achievement of a critical milestone in the Edcon business rescue plan. The parties will continue to co-operate and work towards concluding the sale of Edgars’ businesses in other various jurisdictions in Africa (namely Botswana, eSwatini, Lesotho and Namibia), where various regulatory approvals and conditions precedent remain
outstanding.

SAA business rescue plan approved

By Bonga Dlulane for EWN 

The South African Airways (SAA) business rescue plan (BRP) has been approved by 86% of the vote at Tuesday’s creditors’ meeting.

This paves the way for the Department of Public Enterprises (DPE) to launch a new airline with an interim board and CEO.

The department will announce a new board soon and the interim CEO of the airline is Phillip Saunders.

The approval of the plan comes after months of public spats between the department, unions and business rescue practitioners.

It’s a major win for the department as it has fought for SAA to be restructured and not liquidated.

The new airline will need approximately R16 billion to get off the ground and pay creditors.

Money will also be needed for the 1,000 staff who will be hired to be part of the airline.

With the approval of the plan, voluntary severance packages will be paid to over 2,700 employees who will now be retrenched.

Liquidation may be the only option for SAA

By Babalo Ndenze for EWN

Some members of Parliament said that the only option left for South African Airways (SAA) was liquidation.

This comes after a vote on a restructuring plan was delayed until July after creditors and unions adjourned talks.

It also follows a decision by the Department of Public Enterprises to withdraw from the Leadership Consultative Forum working on a business model for a new and restructured SAA.

The Department of Public Enterprises said that instead of creating conditions for attracting investment and skilled South Africans, three unions had put SAA on a path towards possible liquidation.

The department said that unions had effectively aligned themselves with a competitor who stood to benefit substantially should SAA be liquidated.

However the Democratic Alliance (DA)’s Alf Lees, a member of the Standing Committee on Public Accounts (Scopa), said that liquidation was increasingly looking like the only option.

“Now it seems to me that we’ve hit the wall and liquidation is the only option,” Lees said.

He said that the business rescue process should ideally have ended in December and the rescue team should have applied to court for liquidation back then.

“They should have then done what the law required of them to do and applied to court for liquidation, so that step now remains.”

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