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GOVERNMENT may have another week – until July 22 – to provide the funding commitment for the SAA business rescue plan (BRP), according to proposed amendments to the plan published just before midnight last night.
The amendments follow submissions by creditors, 69% of who on June 25 decided to postpone a vote on the plan until July 14, when they are to meet again.
According to the new proposals, the plan will be deemed un-implementable should Government fail to commit to funding it by July 22. In that case, creditors would meet again on July 24 to consider amending the plan yet again. If that fails, the business rescuers will discharge the process and the airline will be liquidated.
In addition, it is proposed that lenders shall have the right to call in Government guarantees if Government fails to make the first repayments totalling R5,8bn to secured lenders (R3,8bn to pre-commencement lenders and R2bn to PCF Bank) by August 31.
The July 14 meeting is to go ahead, according to a late-night statement by the Department of Public Enterprises (DPE), in which it claims that all trade unions – except the SAA Pilots Association – have now agreed to the R2,277bn voluntary severance package (VSP). DPE says this adds momentum towards the adoption of the plan, which will have to be carried by 75% of creditors when put to the vote.
This follows a meeting of the Labour Consultative Forum (LCF) convened by trade unions yesterday (July 7). However, the pilots’ position on the VSP remains unclear. “SAAPA has indicated that they do not oppose the outcome of today’s LCF meeting, but the union is seeking to embark on a parallel process through which they want to consult the BRPs about the severance packages,” DPE says.
“In terms of today’s agreement, 1 000 SAA employees will be retained. Around
2 700 SAA employees will be retrenched and will be able to access the VSPs as soon as a business rescue plan for SAA is endorsed by a creditors vote,” it adds.
Amendments to the BRP mostly deal with the VSP. If implemented, only 1 000 employees will be retained. Existing terms and conditions of employment will be terminated and new market-related terms will be negotiated.
As part of a skills development and social plan, another 1 000 employees will be placed on a training lay-off scheme for 12 months. They will remain employees of SAA, but will not receive a salary. SAA will contribute a maximum of R4 650 towards their pension, UIF and company medical aid. SAA will also assist them in securing additional benefits, including TERS (temporary employee relief scheme) from the UIF. These employees will get preference when a position becomes available in the restructured airline, provided they have the required skills and competence.
DPE says all severance packages will be topped up by SAA in the event that any package is less than R200 000, to ensure all packages provide minimum benefits. VSPs for employees will include one week pay per year of completed service, one-month notice pay, accumulated leave paid out and a 13th Cheque.
Source: tourismupdate.co.za