(3 minutes read)
· The Competition Tribunal of South Africa allowed the operator of Kulula.com and British Airways in South Africa to merge to form a new venture SA Bidco, on condition that the two companies preserve jobs in the airline for the next three years
· SA Bidco got its approval to continue with the transaction subject to certain employment and ownership conditions of the merged entity including that the merger would save a large number of jobs in Comair
The Competition Tribunal of South Africa allowed the operator of Kulula.com and British Airways in South Africa to merge to form a new venture SA Bidco, on condition that the two companies preserve jobs in the airline for the next three years. After holding a virtual hearing on the proposed merger between Comair and SA Bidco recently, the
Competition Commission conditionally approved the deal. Comair’s business rescue practitioners had also approved the merger. The resumption of operations would help the airline to resolve its current financial situation.
Comair was referred to business rescue on 5 May 2020. But the business rescue practitioners insisted that the airline could begin flying again in December if their proposed business rescue plan takes steps for infusing more investments. It suggested that an investment consortium, comprising several former Comair board members and executives, called the Comair Rescue Consortium, should inject fresh equity into the company.
SA Bidco got its approval to continue with the transaction subject to certain employment and ownership conditions of the merged entity including that the merger would save a large number of jobs in Comair. However, up to 200 employees would face compulsory retrenchment for operational reasons for a short while. However, the new airline will make employment offers to all affected employees who have been retrenched when jobs become available at the new airline post-merger. This commitment will apply for a period of 36 months after the Flying Start Date and is subject to employees being suitably qualified.
