SA Express: We have not received a business rescue application, and we'll oppose it if we do | Fin24
 
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SA Express: We have not received a business rescue application, and we'll oppose it if we do

Jan 19 2020 16:45
Lameez Omarjee

SA Express says it would oppose an application by a former supplier to have it placed under business rescue.

On Friday Daily Maverick reported that Ziegler SA – a transport and logistics service provider – lodged an urgent application at the Johannesburg High Court as a means to recover about R11.3m in debt the state-owned airline allegedly owes it.

In an emailed response to Fin24, SA Express spokesperson Mpho Majatladi said she had not yet received notice of a court application to have the airline placed under business rescue.

Fin24 reached out to Ziegler SA for comment via email, but has not yet received a response.

Ziegler SA and SA Express had entered into an agreement in February 2017, Daily Maverick reported. Ziegler SA would provide local and international movement of SA Express' aircraft parts and engine parts for maintenance. However, according to Ziegler SA's affidavit, SA Express did not honour payments within the stipulated timeframes of the agreement and now owes the supplier as much as R11.3m, Daily Maverick reported.

Majatladi said that if a court application was indeed made by Ziegler SA, then it may be "under malicious intent" as the supplier had been identified as "one who seeks benefits from irregular contracting".

"This supplier is one of many who are currently under internal review for serious abuse of the procurement system, unfair pricing and overcharging," Majatladi said.

According to Majatladi, suppliers who obtained their contracts legitimately worked with the airline to ensure payments are reasonable for both parties. However those with "dubious contracts" were constantly trying to "bulldoze" to get their way before the conclusion of irregular contract investigations.

"Actions like these, from such suppliers also undermine the efforts made by SA Express to recover and rebuild governance within the business that has been crushed by corruption, as well as the reputation that the airline is working tirelessly to rebuild," she said.

SA Express reported a net loss of R590m for the financial year ended March 2019. The airline also received a disclaimed audit opinion from the Auditor General of South Africa, as there was not sufficient evidence provided in its financial statements for the AG to conclude that the airline could continue as a going concern.

AG Kimi Makwetu said the airline did not include all the irregular expenditure incurred in its financial statements – and could not determine the full extent of irregular expenditure at the entity.

The irregular expenditure stated was R834m, up from R677m reported in March 2018.

SA Express is a low-cost airline established in 1994 and has routes within SA and in the African region. It is a separate entity to national carrier SAA. Both the airlines fall within the oversight of the Department of Public Enterprises. 

SAA, meanwhile, was placed under business rescue in December.

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