COMAIR’S business rescue practitioners have asked for a month-long extension until August 28 for the publication of the airline’s business rescue plan in order to finalise short-term bridging finance and consider two offers from potential investors. Creditors have until noon on July 29 to object in writing to the extension.
In a statement to shareholders, BRPs Shaun Collyer and Richard Ferguson confirmed that they had received a signed binding offer from a consortium of interested investors on July 23, but that it contained several conditions that needed to be satisfied.
This followed a signed, but non-binding offer from another consortium received on July 22, which also contained several material conditions to be satisfied prior to such offer being binding.
“The practitioners are in the process of considering these two offers in order to understand if the parties will be able to fulfil the conditions contemplated in these offers, and if any one of these two offers provide a sustainable remedy to the company's financial distress,” they said.
In addition, the BRPs said they were in the process of negotiating short-term bridging funding as post-commencement finance, which was needed urgently to ensure that Comair could meet its limited operational overheads and for the business rescue process to continue.
Comair CEO, Wrenelle Stander, in a notice to staff, said the additional time would allow the BRPs to review and understand whether the two offers received would provide a sustainable solution to rescue Comair. She said the BRPs would have to confirm that the conditions contemplated in these offers could be satisfied. She said negotiations for short-term bridging finance to meet current overheads were progressing.
Stander previously confirmed the potential investors were offering up to R1,5bn (€77m) in the form of debt and equity, including a cash injection.
Meanwhile, financial advisory firm, Redford Capital, withdrew from the capital raising process last week amid criticism of conflicts of interest, as both BRPs are directors of the firm.
Comair went into voluntary business rescue on May 5. In accordance with the Companies Act, the BRP should have been published after 25 days, but creditors previously granted an extension to July 28 to allow time to advance an earlier non-binding offer, which was not taken forward.