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S.Africa's Comair needs $72 mln and to cut 400 jobs, administrators say

Thu, 3rd Sep 2020 10:33

* Plan seeks 500 million rand equity funding

* Will need debt infusion of up to 700 mln rand

* Comair can start commercial flights from Dec

* Plan approval meeting on Sept. 18

JOHANNESBURG, Sept 3 (Reuters) - South Africa's Comair Ltd
will require up to 1.2 billion rand ($72 million) of
funding and will have to cut a fifth of its workforce to restart
operations, administrators in charge of restructuring the
private airline said.

The airline, which has been under a form of bankruptcy
protection since May, will be able to start operations in
December if a business rescue plan presented late Wednesday is
approved, they said.

The plan, which had been delayed by over two months, will
see a group of investors injecting up to 500 million rand of
equity, giving them 99% ownership of the company.

Creditors will also have to provide new debt funding of up
to 600 million rand, along with another 100 million rand debt
from insurer Discovery Ltd.

"This (plan) will further result in resumed employment for
the company's remaining employees, the provision of flying
services to its customers and the establishment of resumed
revenue with which to service its obligations," administrators
Shaun Collyer and Richard Ferguson said.

The company's total workforce will be cut to 1,800 from
roughly 2,200 and its fleet will be trimmed to 25 aircraft from
27, they added in their plan https://www.comair.co.za/business-rescue/business-rescue-plan-and-meetings
published on the company's website.

Comair was forced to halt operations from March 26 as South
Africa imposed a travel ban to counter the COVID-19 pandemic,
cutting off the company's cashflow and its ability to service
burgeoning debt.

Creditors will meet on Sept. 18 to vote on whether to
approve the rescue plan.

If approved, the plan will be implemented by the end of
November so the airline can start operations by Dec. 1.

Before ceasing operations, Comair operated the local British
Airways franchise and budget airline Kulula.com. It was a beacon
of private aviation in South Africa for almost seven decades.

The plan will also require the company to be delisted from
the Johannesburg Stock Exchange, where its shares had been
trading for over two decades.

($1 = 16.7645 rand)
(Reporting by Promit Mukherjee; Editing by Mark Potter)

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