Nearly 700 jobs to be lost as SA Express undergoes provisional liquidation

The struggling SA Express airline has been placed under provisional liquidation by the Johannesburg High Court, making it the very first state owned enterprise (SOE) to do so following failed business rescue.

Business Rescue Practitioners (BRPs) of SA Express, Phahlani Mkhombo and Daniel Terblanche, launched an urgent court application on 25 March to provisionally liquidate the airline after they were unable to mitigate its financial losses. 

The Department of Public Works chose not to oppose the ruling, however all parties will still have the opportunity to appeal the decision. 

A liquidation official will be administered to the case regardless. 

BRPs unable to save airline

The fate of the failed airline, which was placed under involuntary business rescue by the high court on 6 February 2020 was determined via a zoom conference call due to lockdown restrictions preventing a court gathering including all the relevant parties, and Judge Mpostoli Twala said Mkhombo and Terblanche had satisfied the merits of having SA Express placed under provisional liquidation.

Government would have been required to foot the bill of between R438 million and R691 million in funding to give the airline any hope of survival, and this was ultimately deemed too much to provide. 

Without that funding, the BRPs would not be able to reach out to any commercial banks for further funding, thus sealing the fate of the small scale domestic carrier. 

Flash sale in June  

Ultimately, the final nail in the coffin for the airline is expected in June when all relevant parties meet again to conclude the final liquidation. 

Stakeholders have been encouraged by Twala to put forward their reasons why the court should not order the final liquidation of the airline before that date. 

In the event that no relief is forthcoming, over 600 workers are set to lose their jobs as the airline will be forced to permanently cease its operation and sell off the remainder of its assets.