Comair in Business Rescue

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GL
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Comair in Business Rescue

Unread post by GL » Tue May 05, 2020 9:52 am

I hear Comair is applying for Business rescue today.
What if humanity is the disease and Covid-19 the cure?
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Re: Comair in Business Rescue

Unread post by Whirly » Tue May 05, 2020 9:55 am

I can't think of an airline that would not have to go that route. :(

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Re: Comair in Business Rescue

Unread post by GL » Tue May 05, 2020 9:59 am

Safair cant be far behind - but what are the chances of them getting government aid? - basically zero.
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Re: Comair in Business Rescue

Unread post by GL » Tue May 05, 2020 10:07 am

Yesterdays TNW:
Cash-strapped Comair streamlines executive team
by Hilka Birns


More managers have left Comair as it completes the streamlining of its executive team, a move that will save R23m annually and allow the airline to make quick decisions and changes to its business strategy, improve organisational focus and allow the leadership to gain more control over operations, says ceo, Wrenelle Stander.

This comes as Comair’s share price fell by 21% on Thursday after a cautionary announcement to shareholders of its rapidly deteriorating financial position due to the five-week lockdown, leaving it “in a very difficult financial position”. The company already posted a half-year operating loss of R562m ending December. It does not anticipate operating again before October/November because of Government’s COVID-19 risk-mitigating requirements.

The latest departures are Iain Meaker, executive manager commercial distribution; and Brian Kitchin, executive manager sales, marketing and distribution. Earlier departures included airline division chief and former joint-ceo, Glenn Orsmond, and flight operations director, Capt. Martin Louw. The R75m acquisition of Glenn’s company, STAR Air Cargo, has been terminated.

Wrenelle says the restructuring of the executive team concludes the first phase of a Section 189 Labour Relations Act process initiated on March 23. The next phase involves staff retrenchments, facilitated by the CCMA, involving trade unions and employee representatives. The CCMA will determine the timelines.

Comair Travel continues to operate following Iain’s departure, albeit at a scaled-down capacity because of the travel ban. “The Comair travel business is in safe hands,” says Iain. “A strong management team is running the various travel divisions, so I have faith it will grow from strength to strength.” His reasons for leaving are personal, says Iain, and his future plans have not been finalised.

Comair, meanwhile, informed shareholders it was focusing on cash preservation, cost-cutting, disposing of non-performing assets and strengthening its balance sheet. It has closed its SLOW in the City business lounge in Sandton and disposed of Course Restaurant. It is negotiating with banks to secure bridging finance; and supports industry initiatives lobbying for Government aid. It is also negotiating with Boeing to cancel its B737 MAX 8 orders and for compensation for the B737 Max 8 grounding.
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Re: Comair in Business Rescue

Unread post by Ray W » Tue May 05, 2020 10:29 am

This is so sad
Old age & treachery will triumph over youth & skill
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Re: Comair in Business Rescue

Unread post by thewssh » Tue May 05, 2020 1:54 pm

Why don’t we wait to see what the company actually says instead of starting potentially detrimental rumours!
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Re: Comair in Business Rescue

Unread post by Falafel » Tue May 05, 2020 2:32 pm

thewssh wrote:
Tue May 05, 2020 1:54 pm
Why don’t we wait to see what the company actually says instead of starting potentially detrimental rumours!
Seriously because what, maybe people will be worried about booking them right now :?: Affect the share price maybe :?: Ssshhhh dont let the staff know that airlines are struggling right now :wink:

Where you been, rumours will have no effect right now even if anyone agreed with you... since no one booking anyway... we cant travel outside our door let alone get on a Comair aircraft... heck the 3 hours that we have to exercise doesnt even give me enough time to get to the airport and get to ANY destination... :roll: :roll: :roll: :roll: :roll:
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Re: Comair in Business Rescue

Unread post by ARM505 » Tue May 05, 2020 3:01 pm

So where does it say officially that it's going into BR?
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Re: Comair in Business Rescue

Unread post by Jayson v Schalkwyk » Tue May 05, 2020 3:12 pm

GL wrote:
Tue May 05, 2020 9:52 am
I hear Comair is applying for Business rescue today.
GL, can you confirm your source or at least give more detail?
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Re: Comair in Business Rescue

Unread post by Reality » Tue May 05, 2020 3:31 pm

South African airline Comair applies for business rescue
by Reuters
Tuesday, 5 May 2020 13:24 GMT
JOHANNESBURG, May 5 (Reuters) - Comair said on Tuesday that it has filed for voluntary business rescue - South Africa's bankruptcy protection process - after a nationwide lockdown to curb the spread of the coronavirus forced airlines to suspend all commercial flights.

Comair, which operates the British Airways franchise in South Africa and owns budget airline Kulula, also said it has applied to the Johannesburg Stock Exchange for its shares to be suspended with immediate effect.

(Reporting by Nqobile Dludla; Editing by Olivia Kumwenda-Mtambo)

Our Standards: The Thomson Reuters Trust Principles.
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Re: Comair in Business Rescue

Unread post by Only » Tue May 05, 2020 3:39 pm

Jayson v Schalkwyk wrote:
Tue May 05, 2020 3:12 pm
GL wrote:
Tue May 05, 2020 9:52 am
I hear Comair is applying for Business rescue today.
GL, can you confirm your source or at least give more detail?
https://www.fin24.com/Companies/Industr ... e-20200505
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Re: Comair in Business Rescue

Unread post by Falafel » Tue May 05, 2020 3:45 pm

As hard as it is, I think its the only choice they have if they want to have a chance in SA right now... no state funding and no indication as to when/if they will get going again... tough call and good luck to them all :!:
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Re: Comair in Business Rescue

Unread post by ARM505 » Tue May 05, 2020 3:49 pm

I guess the government thought that the airline industry is pretty simple, the last guy out can park the Boeing on the pavement somewhere, switch the lights off on the way out the office, and we could all just return 6-8 months from now, fire it all up again, and everything would be cool.

Honestly, lockdown is one thing, but we've taken a loaded gun, pointed it our heads, and pulled the trigger. More misery will be induced by lockdown than by the WuFlu.
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Re: Comair in Business Rescue

Unread post by GL » Tue May 05, 2020 4:06 pm

Comair enters business rescue in response to unprecedented circumstances resulting from Covid-19
- Move aims to restructure the airline as a sustainable business
Tuesday, 5 May 2020: Listed airline company, Comair, today announced the group will enter business rescue to safeguard the interests of the company and its stakeholders after the Covid-19 crisis disrupted the implementation of a turnaround plan.
Comair CEO, Wrenelle Stander, said the company, which reported a half-year loss of R564 million for H1 F20, faced an unprecedented situation following the Covid-19 lockdown.
“While we had started making good progress to fix the financial situation six months ago, the crisis has meant we have not been able to implement it as we intended.
“We completely understand and support the government’s reasons for implementing the lockdown, however as a result we have not been able to operate any flights. Now that the phased lockdown has been extended the grounding is likely to endure until October or even November. These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs. The only responsible decision is to apply for business rescue.”
In terms of the lockdown Comair was required to stop flying on 26 March and has not operated any passenger services since. The Covid-19 crisis has also severely affected the global airline industry. A number of carriers have gone out of businesses. Others such as Virgin Australia and Air Mauritius have implemented restructuring processes, similar to business rescue.
“Comair remains solvent and an important contributor to the South African economy. This is a necessary process to ensure a focussed restructuring of the company takes place as quickly as possible so we can take to the skies again as a sustainable business and play our part in the county’s airline industry,” says Stander.
Shaun Collyer and Richard Ferguson have been appointed as the joint business rescue practitioners with effect from 5 May 2020.
Comair was granted approval to suspend the trading of its shares on the JSE with immediate effect. The business rescue practitioners will provide shareholders and all other stakeholders with further updates throughout the process.
The business rescue process will build on the turnaround plan that Comair management was already implementing. It aims to preserve cash, cuts costs, dispose of non-performing assets and strengthen the balance sheet. The Section 189A process, which was part of this plan and that began on 23 March, will continue.
The business rescue practitioners will work with the management team and the board towards Comair resuming operations in accordance with all regulatory requirements, including the health protocols to prevent the spread of Covid-19. Stander said Comair will resume its operations in accordance with government directives and will continue to engage with government to accelerate the opening of the airline industry.
“The health and welfare of our customers, crew and the public is the overriding priority and we will only operate when we are sure we can do so safely.”
Customers with existing bookings will be able to rebook flights within 12 months of their departure date. There will be no charge for any changes made before 1 November 2020.
“Through this process we intend to right-size our operations to be more efficient, agile and customer-centric. This includes, but is not limited to, reconfiguring our network and fleet mix, reviewing portfolios and joint ventures, increased digitisation of the business and new product development and delivery,” says Stander.
“We are confident that with the work we’ve already done and the support of our stakeholders we will get through this process and will be a more sustainable business, better positioned to continue serving the flying public and contributing to the South African economy.”
The business rescue practitioners will contact all stakeholders and suppliers to plan the way ahead in accordance with the processes set out in the Companies Act.
Notes to editors
In its H1, FY20 results Comair reported a half-year loss of R564 million. Although revenue grew by 3% this was not enough to offset cost increases of 14% resulting from significantly higher fleet and maintenance costs.
Prior to the unprecedented difficulties resulting from the Covid-19 crisis Comair management, together with an external advisory team, had been implementing a turnaround process. Actions taken to date include:
• Finalisation of Phase One of a two-phase Section 189A process, resulting in a streamlining of the executive team, saving R23 million;
• Implementing Phase Two of the Section 189A process to reduce overall headcount;
• Mutual termination of the STAR Air Cargo transaction;
• Disposal of the Course Restaurant;
• Closure of SLOW in the City;
• Engaging Boeing on the cancellation of 737 MAX 8 orders and payment of compensation relating to the grounding of the 737-MAX 8.
Additional steps the company has since taken include:
• Participation in industry initiatives to lobby government for special aid/ concessions for the industry and an earlier start-up date subject to agreed health protocols being put in place;
• Negotiations for bridging finance with a consortium of banks. These have been constructive and are ongoing;
• Investigating the options available to raise additional capital including a rights issue or convertible preferred share issue or convertible loan note issue.
The R790 million SAA owed Comair as a consequence of anti-competitive practices was accounted for in the H1 2020 financials.
Customers with existing bookings, wanting to change their reservations can do so online using the manage my booking functionality. Alternatively, they can email feedback@kulula.com Comair is experiencing high email volumes but will respond to all enquiries and requests as soon as it is able. The call centre is presently closed. Customers will be informed when it reopens and will then also be able to change bookings by ‘phone.
What if humanity is the disease and Covid-19 the cure?
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Re: Comair in Business Rescue

Unread post by rainier » Tue May 05, 2020 4:18 pm

This is getting more serious by the day.
One headline I did not want to see. Ever.
I hope they will be able to hold on somehow to allow a restart as soon as possible.
Who said the sky is the limit ? I think not.

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