South African Express liquidation postponed for another three months

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The final liquidation of South African Express has been postponed for another three months on the request of trade unions who want to take the matter to the country’s Constitutional Court and National Assembly. A virtual hearing of the South African High Court in Johannesburg on April 29, 2021, extended the court return date of the liquidation to July 28, 2021.

This followed an urgent application to the court by the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA), whose members are former employees of SA Express and creditors of the provisionally liquidated state-owned airline. The unions intend to approach the Constitutional Court to compel Parliament to decide if the airline should be allowed to go insolvent. They are hoping that Parliament will hold the Ministers of Public Enterprises and Finance to account for not recapitalising SA Express, as they have done with sister airline South African Airways.

The unions are hoping that, should the Constitutional Court rule in their favour, the Ministers, who are presently not opposing the liquidation, might consider recapitalising the airline or find potential equity partners. NUMSA, in court papers, contends that in the absence of Parliamentary oversight, a state-owned company cannot be finally liquidated by a court. The unions intend to file papers in the Constitutional Court between April 30 and May 7, 2021.

The final liquidation of SA Express has now been postponed five times. It was set down for April 29 after the sale of the airline to Fly SAX, a special purpose vehicle comprising former employees, fell through earlier this month after their financial backer pulled out.

The airline’s material assets have been sold off for ZAR24.7 million (USD1.6 million) and its licenses and Air Operator’s Certificate (AOC) have expired. Its 800 employees were sacked after the airline went into provisional liquidation in April 2020 after it had been in bankruptcy protection since February 2020. Fly Modern Ark (Johannesburg O.R. Tambo) has offered to pay ZAR1 (USD0.06) for the brand.

As yet unnamed key directors of the carrier have been subpoenaed in connection with an insolvency inquiry into financial and operational impropriety at the airline.

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