Comair, the listed operator of low-cost carrier kulula.com and British Airways in SA, said on Friday that it will meet SAA’s newly appointed business rescue practitioner Les Matuson to discuss the more than R1bn settlement it won against the national airline.
Chapter six of the Companies Act, which deals with business rescue procedures, however, puts a moratorium on creditor claims against a company in business rescue. According to the legislation, no legal proceedings and enforcement actions can be instituted against a company in business rescue, which is a legal process to rehabilitate a financially distressed company through a turnaround plan.
SAA, which has gone into business rescue, is supposed to pay Comair a total of R1.1bn as part of a settlement agreement relating to SAA’s anti-competitive conduct dating back 14 years.
Comair alleged that SAA paid travel agents to divert customers to its flights between 2001 and 2006.
In February, Comair said the companies had agreed on a payment schedule starting on February 28 2019 and terminating on July 28 2022, or earlier should SAA elect to elect to make payments earlier than agreed.
Comair, which on Friday said it expected earnings for the six months to end-December to fall by more than 20%, said it intends to meet with Matuson “in due course” to discuss the settlement.
“It is too early at this stage to speculate on what is going to transpire with the payment due by SAA to Comair as a result of the settlement reached with them arising out of Comair’s damages against SAA as a result of their anti-competitive travel agency agreements,” Comair said in a statement.
Comair’s shares were down 4.29% to R3.35 on Friday. The stock is down 36.92% since the beginning of 2019.
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