IOL - BUSINESS REPORT - COMPANIES / 03 SEPTEMBER 2020 - 16.55 / PHILLIPA LARKIN
JOHANNESBURG - Comair, the operator of British Airways in South Africa and low-cost airline kulula.com, plans to axe 400 jobs, delist from the JSE and begin flying again in December if the business plan gets the green light.
According to the business rescue plan published late on Wednesday, the airline would see a fresh equity injection of R500 million by a preferred investor in return for a 99 percent shareholding.
Comair plans to axe 400 jobs, delIst from the JSE and begin flying again in
December if the business plan gets the green light. Picture: RATSTUBEN
Comair said last week it had received a binding offer from their preferred investors in the airline.
Up to 15 percent of this shareholding would be allocated to a suitable broad-based black economic empowerment partner within 12 months, Comair said in a statement.
The first R100m would be paid in two equal tranches in September and October as secured post-commencement finance. Additional funding from lenders of R1.4 billion was required in order to successfully implement the adopted plan. This will comprise R600m in net new debt.
Creditors and shareholders had until September 18 to consider and adopt the plan.
Existing debt would be deferred to provide the remaining R800m, with capital payments deferred for 12 months and interest for six months.
Comair would be de-listed from the JSE and a new board constituted in due course, it said.
Comair entered business rescue in May as Covid-19disrupted the implementation of a turnaround plan and grounded flights.
"In line with this, the workforce will be reduced from approximately 2 200 employees to 1 800 through a voluntary retrenchment and early retirement programmes, as well as the continuation of the Section 189 retrenchment process that the company commenced prior to business rescue," Comair said.
The fleet would comprise 20 aircraft of which 17 will be next-generation Boeing 737-800s and the remaining three Boeing 737-400s.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER