South African Airways creditors approve $1.6b rescue

South African Airways creditors and unions approved a rescue plan that includes at least 26.7b rand ($1.6b) in state funding and thousands of job losses. Voters representing about 86% of those eligible supported the package, first proposed by administrators for the bankrupt carrier a month ago. The motion overcame the 75% threshold after most labour groups agreed to sweetened severance packages last week, clearing the way for the workforce to be cut by almost 80% to 1,000 people. All eyes now turn to the National Treasury, which will need to find about 10b rand more than previously allocated for SAA at a time when state finances are severely stretched by the coronavirus pandemic. Finance Minister Tito Mboweni has repeatedly voiced his reluctance to provide further bailouts to a carrier that hasn’t made a profit in almost a decade, putting him at odds with Public Enterprises Minister Pravin Gordhan. According to SAA’s business-rescue plan published June 16, the Treasury needs to provide a written commitment to provide the funding by Wednesday or the proposals will be deemed unimplementable. The administrators expect to receive a confirmatory letter, Siviwe Dongwana, one of the lead architects of the recovery plan, said at the creditors’ meeting on Tuesday. <br/>