SAA Axes BnP Capital Deal

Courting even further controversy, beleaguered national carrier South African Airways (SAA) cut its ties with little-known ‘boutique financier’ BnP Capital.

Courting even further controversy, yesterday beleaguered  national carrier  South African Airways (SAA) abruptly cut its ties with little-known ‘boutique financier’ BnP Capital.

The board had appointed BnP Capital to advise it on the restructuring of its R15bn debt and to raise the funding, in return for a R256m ($17.9m) success fee. Possibly as a result of the public outcry and subsequent political pressure, SAA has now terminated its relationship with the company.

In a statement released on Thursday (July 21) it said: “South African Airways has taken a decision to terminate the services of BnP Capital as a financial services provider to the airline. The effect of this decision means that SAA has terminated both its appointment of BnP Capital as Transaction Advisor and the appointment to source funds on behalf of the airline.“... The airline denied that the suspension of treasurer Cynthia Stimpel had anything to do with her questioning the BnP Capital deal. It said she was suspended for ‘misconduct’ and that Michael Kleyn has been appointed as acting group treasurer.

SAA also continues to cross swords with finance minister Pravin Gordhan and the national treasury, which confirmed that it will not grant a R5bn guarantee to SAA for the tabling of its financials in parliament, unless a new board is appointed.

Last week the struggling national carrier once again failed to submit its financial statements for the 2014/15 period, forcing the treasury to request another two-month extension. This is the fourth time the airline has failed to submit  financial statements. The new deadline is September 15.

Treasury spokeswoman Phumza Macanda said:.“Treasury recognizes the need to have a full-strength board with the full range of skills required to oversee the turnaround of the airline and is working to advance the process for appointing such a board.”

Opposition party, the Democratic Alliance (DA), has said it believes application should be made to a high court for an order to place SAA under supervision and commence business rescue proceedings. "This is to further prevent . . . [chairwoman]Myeni and her dysfunctional board from driving the airline deeper into the ground and threatening our economy," Alf Lees, DA MP and shadow deputy minister of finance said.

Lees maintained that under Myeni's leadership, SAA has been plagued with financial problems "with assessed losses of R18-billion to date and little sign of a turnaround".

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