South African airline Comair has announced a restructuring process that, if successfully implemented, could see the airline resume flights by December. As part of the adopted plan, former board members and executives of Comair will buy out the airline.
The vast majority of creditors and shareholders voted to adopt the business rescue plan, which would see a fresh equity investment of R500 million in return for a 99% shareholding.
Comair goes into business rescue:
The struggling airline, which operates the British Airways franchise in South Africa and budget airline Kulula.com, was forced to halt all activities in March when the country went into nationwide lockdown to curb the spread of the coronavirus (COVID-19).
The approved rescue plan also entails R600 million in fresh loans from its lenders, a deferred payment of R800 million and delisting from the Johannesburg Stock Exchange (JSE).
Comair plans to start operations by December under both the British Airways and Kulula brands.
Outstanding employee salaries
In early September, the National Union of Metal Workers (NUMSA) filed an urgent interdict at the Johannesburg Labour Court on Friday to compel Comair and its Business Rescue Practitioners (BRPs) to pay outstanding salaries to employees. Comair has not paid staff salaries since 1 June 2020.
The airline also failed to pay their portion of the medical aid and unions said they imposed unpaid leave on employees. This was done shortly after the company went into business rescue.
“We want to make it clear that as NUMSA we were not consulted in this business rescue plan that was recently published, employees were not a priority and funding was used for other purposes and to protect other stakeholders at the expense of workers. One of the proposals which have been made is that workers must sign away and wave all their rights to remuneration until December and this is part of the business rescue plan and we as NUMSA, we reject this. The BRPs are also attempting to increase their exorbitant fees,” said NUMSA spokesperson Phakamile Hlubi-Majola.
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