Johannesburg – Comair, which operates the British Airways franchise in South Africa and budget airline Kulula.com, will be approaching lenders for additional funding of over R1billion required for it to fly again following a successful adoption of the business rescue plan.
A majority of the airline’s creditors and shareholders on Friday voted to adopt the business rescue plan following a 1-month extension for its publication to negotiate post-commencement finance from potential investors.
Comair said the funding of R1.4billion would comprise of R600 million in new debt while the remaining R800 would be deferred debt, with capital payments deferred for a year and interest for six months.
The airline said a number of former board members and executives would invest fresh equity of R500million in return for 99% shareholding once the suspensive conditions have been met.
At least R100million of this would be paid in two equal tranches as secured post-commencement finance during the next two months.
According to the struggling airline, up to 16% of this would allocated to a suitable BBBEEE partner within 12 months.
Comair would be de-listed from the JSE and a new board constituted.
Business rescue practitioner, Richard Ferguson, said a number of suspensive conditions in the rescue plan must still be met.
The business rescue process is expected to be concluded by March 31, 2021, after which Comair will continue to operate as a sustainable business.