South Africa

South Africa’s Department of Public Enterprises announced its withdrawal from a panel that was established to facilitate talks with the troubled national airline’s workers about its planned overhaul, accusing three labor unions of undermining its work and putting jobs at risk, Bloomberg News reported. South African Airways was placed into a form of bankruptcy protection six months ago after a succession of managers failed to restore it to profitability and Finance Minister Tito Mboweni urged an end to repeated bailouts.

South Africa’s finance minister has warned that Africa’s most industrialised economy is on the verge of a sovereign debt crisis and its biggest contraction in almost a century, as the country’s coronavirus epidemic gathers pace, the Financial Times reported.

A vote on a restructuring plan for loss-making South African Airways (SAA) was delayed until next month on Thursday, after some creditors and trade unions secured an adjournment after months of wrangling over the airline’s future, Reuters reported. The administrators, who took over SAA in December after almost a decade of financial losses, published their restructuring plan last week and now expect the vote to take place on July 14.

South Africa’s public enterprises ministry on Wednesday urged creditors to back a restructuring plan for South African Airways (SAA), saying it was the only way to rescue the loss-making airline, Reuters reported. Creditors are due to vote on the plan on Thursday, but one of the creditors - private airline Airlink - is in court on Wednesday trying to prevent the vote from happening. State-owned SAA’s administrators published the proposal last week after repeated delays and months of wrangling.

Administrators in charge of South African airline Comair said on Tuesday they have been given an extension to June 30 to submit a restructuring plan for the carrier, Reuters reported. Earlier in the day the administrators said they had received a cash offer for the carrier from a company they did not name. The administrators, who had been expected to present a restructuring plan for the airline on Tuesday, asked creditors for another week - until June 30 - to finalise the cash offer before presenting the plan.

South Africa plans to oppose an application by regional airline Airlink to put South African Airways (SAA) into provisional liquidation and prevent a meeting of SAA’s creditors to discuss a restructuring plan, the government said on Monday, Reuters reported. Airlink was a franchisee of state-owned SAA for over two decades, an arrangement that allowed SAA to sell tickets and fly passengers on Airlink flights. SAA still owes some fees to Airlink, making the latter an unsecured creditor.

A group of creditors of South African retailer Edcon has made a court application to halt meetings scheduled for Monday to consider a proposed restructuring plan for the company which is under bankruptcy protection, Reuters reported. Edcon, which owns department store chain Edgars and budget retailer Jet, entered a form of bankruptcy protection in April after its sales were hit after the coronavirus crisis lockdown. Edcon, which opened its first Edgars store in Johannesburg in 1929, had already been struggling due to falling local demand and slow economic growth in South Africa.

Two South African unions on Friday rejected job cuts proposed to rescue South African Airways, which has cost the government more than a billion dollars to stave off bankruptcy and will cost it about half that again to reform, Reuters reported. State-owned SAA went into a form of bankruptcy protection in December, and since then state-appointed administrators have been trying to see what they can salvage. Unions had been in discussions with them and had previously accepted that some job cuts would be necessary.

South African retailer TFG said on Thursday it planned to raise 3.95 billion rand ($229.66 million) through a rights offer to lower its debt and protect its balance sheet, as profit fell by 1.1% in the year to March 31, Reuters reported. TFG, which also operates in Australia and Britain, said the proposed rights offer was fully underwritten by a syndicate of banks comprising three of its largest lenders, and its major shareholders have shown support.

The South African Reserve Bank will resist calls to finance the government’s growing budget deficit with aggressive quantitative easing because that could add even more strain on the National Treasury, Governor Lesetja Kganyago said, Bloomberg News reported. If the central bank were to buy 500 billion rand ($29 billion) of government bonds and then mop up the excess liquidity by issuing bonds at the current repurchase rate of 3.75%, it would be insolvent in about a year, Kganyago said in an online lecture Thursday.