The saga over the liquidation of South African domestic carrier Sun Air has taken a further twist. Liquidators claim to have unearthed a deal between South African Airways (SAA) and leasing company Safair which effectively kills any chance of revival for the defunct carrier.
SAA's bid for a majority stake in Sun Air has caused controversy ever since it was announced six months ago. It was viewed as a hostile takeover by staff who attempted to find new backers, including Virgin. Ken Moses, of court-appointed liquidators Westrust, reveals that SAA had already paid Safair R50 million ($8.3 million) in a deal designed to offset any losses that Safair might have incurred from placing five Boeing MD-80s, repossessed from Sun Air, outside southern Africa.
SAA and Safair have denied the claims but have refused to comment further until called to give evidence before the Master of the Supreme Court which is conducting an inquiry in terms of the Companies Act into the demise of Sun Air.
Meanwhile, Westrust has revealed a deal between Safair and SAA which would see the company divide up a further estimated R50 million in Sun Air assets between them. This may not have come to light, says Moses, had SAA been successful in obtaining a voluntary winding up of Sun Air through a liquidator of their own choice. Instead the Master of the High Court appointed four independent liquidators.
According to an agreement between SAA and Safair, now in the possession of the liquidators, Safair would sell off four McDonnell Douglas DC-9s overseas. The proceeds of this would go towards settling a R70 million debt owed to Investec, against which the bank was holding R47 million of Sun Air's money in securities and trusts. A tangled web of agreements effectively meant that this would cover the cash given over by SAA, possibly with some surplus to split. Funds might also be realised by the two companies from the sale of an unencumbered DC-9 over which Safair registered a bond four weeks before Sun Air's liquidation.
"The deal was without the knowledge of either Sun Air or the trust and surpluses could have amounted to about R50 million, none of which would have gone to creditors," says Moses. Asked whether SAA would get back its R50 million already paid to Safair, Moses said that was a matter between the two companies to resolve. "We don't recognise any of the agreements entered into between SAA and Safair. The aircraft in question rest with the liquidators to dispose of as they see fit," he said.
Source: Airline Business
