SA Express liquidator, FlySAX clash over rescue delays

A war of words has broken out between the provisional liquidator of South African Express (EXY, Johannesburg O.R. Tambo) and FlySAX SA, the preferred bidders attempting to rescue the provisionally wound-up state carrier.

Aviwe Ndyamara, in a statement, has lashed out at FlySAX SA – a special purpose vehicle created by former employees – for publicly accusing him of deliberately frustrating the rescue plan “until such time that there is nothing left to salvage from SA Express, which would see the airline going into final liquidation”.

For his part, Ndyamara has accused FlySAX SA of having delayed the process since 2020 by not having provided proof of funding and satisfactory guarantees. “The majority of delays in the process have been due to FlySAX SA. Had they not delayed the process, the liquidators would have been in a position to entertain other bidders,” he charged.

In a statement on January 27, FlySAX SA group representative Thabisile Sikakane made an urgent appeal to the liquidator to “accept a rescue bid – before it is too late”. “FlySAX SA has been working tirelessly to stave off final liquidation, and our team is ready to salvage whatever is left of SA Express and resuscitate it before it completely loses its routes and operating license.”

SA Express has been in provisional liquidation since April 2020 after it had been in bankruptcy protection since February 2020. Its material assets have been auctioned off and its licenses and certifications have expired, but the former employees are adamant its brand is worth saving.

Sikakane revealed that a new bid had been submitted, and an undisclosed amount had been paid into the liquidators’ account after FlySAX SA had secured a new anchoring investor, venture capital experts, Global Impact Investments. “We are calling for the offer to be accepted and for the [shareholder representative] Department of Public Enterprises to approve the sale,” she said.

This followed a failed rescue bid by FlySAX SA in April 2021 after their then backers, Johannesburg investment firms Strategic Investment Group Africa (SIGA) and Harith General Partners, pulled out. Harith has since partnered Global Aviation Operations (GE, Johannesburg O.R. Tambo) in the Takatso Consortium announced as the preferred strategic equity partner for South African Airways (SA, Johannesburg O.R. Tambo).

FlySAX SA in May 2021 had made a revised offer based on raising ZAR150 million rand (USD10.4 million) in working capital through crowdfunding, to be spearheaded by Uprise.Africa lead by failed SkyWise (SWZ, Johannesburg O.R. Tambo) co-owner Tabassum (Tabz) Qadir.

However, in a countering statement on January 28, Ndyamara said the entire structure of FlySAX SA, its shareholding, and the involvement of Uprise.Africa and crowdfunding were still not clear to the liquidators. “Throughout the process, Uprise/FlySAX SA introduced a series of attorneys claiming that they hold funds for and on behalf of FlySAX SA but could not provide proof of funds held,” he said.

“During March 2021, FlySAX SA approached ABSA [Bank] for funding (even though funding was due in October 2020). To our knowledge, nothing materialised. Having been unsuccessful in raising capital and breaching every offer previously made, FlySAX SA became opportunistic and submitted a new offer, on June 9, 2021, to acquire SA Express for a mere ZAR500,000 (USD32,843) which offer was not suitable to the liquidators and was not accepted. This clarifies that as of the middle of 2021, they still did not have funding and were delaying the process.”

“In November 2021, another offer was received from a consortium that consisted of “Uprise Group (Pty) Ltd in a joint venture with FlySAX SA, Uprise Aviation, Impact Africa and labour unions”. The offeror is no longer FlySAX SA; it is seemingly a joint venture between “FlySAX SA, Uprise Aviation (Pty) Ltd and Uprise Group (Pty) Ltd”. The shareholders of these entities are unknown, and the individuals behind these entities are likewise unknown, nor have they been disclosed to the liquidators. FlySAX SA’s delays for the past two years cannot be laid at the feet of the liquidators. The ability for any successful buyer to trade the airline profitably in the future is uncertain, especially where there is no fleet or assets,” Ndyamara said. “FlySAX SA needs to be honest about their dealings and how they intend to take this matter forward,” he concluded.

The final liquidation court hearing of SA Express has been postponed seven times and is now scheduled for July 4, 2022.