South African Airways Says State Exploring Funding Options

(Bloomberg) -- South African Airways' administrators extended a deadline for workers to agree to severance packages after Minister for Public Enterprises Pravin Gordhan said he needs time to explore funding options for the bankrupt state-owned carrier.

The business-rescue team led by Les Matuson and Siviwe Dongwana are trying to persuade labor groups to sign off on retrenchment deals as a possible alternative to liquidation proceedings, which could see the near 5,000-strong workforce made unemployed without compensation. The plan is opposed by Gordhan, who wants to build a new airline instead.

Read More: South Africa Seeking New Carrier From Ashes of State Airline

Unions now have until May 8 to agree to the offer to workers, according to a letter signed by the administrators and seen by Bloomberg News. If they refuse, all employees -- whether represented or not -- may be given a further three days to make up their own minds.

The Department of Public Enterprises said Friday it wants to create a national carrier that's both publicly and privately owned, profitable and able to serve South Africa's trade connections. The government last month refused a bailout request that SAA's administrators say is needed to keep the carrier running through the coronavirus crisis.

SAA's entire fleet is currently grounded as governments around the world close borders to contain the Covid-19 pandemic.

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