nationwide "may escape liquidation"
08 July 2008

Laher was reluctant yesterday to attach a value to the proposal or say who was behind the offer, but said neither empowerment group African General Equity (AGE) nor any Nationwide director was involved in the offer. Nationwide failed to conclude talks with AGE shortly before the airline closed its doors at the end of April.

In terms of section 311 of the Companies Act, if 75% of the creditors by value agree to the proposal at a court-sanctioned meeting of creditors, the airline may be discharged from liquidation and sold as a going concern.  “We are talking to creditors, and have had a very good response from the major creditors we have spoken to, and are positive the proposal will succeed,” said Laher. “It is a commercial and sensible offer.”

Laher also declined to say how much the airline owed its creditors, as that would prejudice talks with various parties.  However, Nationwide’s court application for liquidation in April shows that on March 31 this year the group had about R48m in assets and total liabilities of R217m.  The papers also indicated that the airline owed fuel supplier BP R9m on April 29. It also owed the Airports Company of SA R9m in fees for the first quarter of the year.
The airline’s assets include a fleet of 10 Boeing 737-200s and three Boeing 727-200s, housed under Nationwide Charter, an associate company. Nationwide Charter, Nationwide Maintenance and Nationwide Support were was placed in liquidation two weeks after the airline.

In terms of the proposed offer, ticket holders whose fares were not honoured by Nationwide will receive a coupon allowing them to use the their tickets within a year from the resumption of trading.  Nationwide employees will also have the option to resume employment with the new company. Many of Nationwide’s staff have found jobs with rival airlines despite still being technically in the employ of Nationwide. Laher stressed that employees would not be forced into honouring their contracts with Nationwide.

In the three months since going into liquidation, liquidator Hannes Muller of Tshwane Trust has received numerous offers from SA and abroad to buy the failed airline, none of which came to fruition. Laher said the current proposal was the only one on the table now, and no others were being considered. He said the proposal might take as long as six months to be finalised.  While Muller could not give details of the offer, he expected to make details public in the next week, once it had been presented to the parties.

Julius Baumann, www.businessday.co.za