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Business Day (Johannesburg)
21 August 2008
Julius Baumann
Johannesburg
Quote:
TIME is fast running out for Blackbird Aerospace to seal its acquisition of failed low-cost airline Nationwide ahead of the peak summer season.
"If we are to relaunch Nationwide we need to do it ahead of the peak season to benefit from the increase in demand. It just makes economic sense," said Vino Eargambram, head of Blackbird Aerospace.
For Blackbird to achieve its target to launch at the beginning of November, the parties needed to sign the deal in the next few days, he said.
If Blackbird's proposal succeeded Nationwide would be moved to Durban International Airport and would initially use the Boeing 737s now in Nationwide's fleet. But this was only a short-term measure as Eargambram would replace the fleet with a newer, more fuel-efficient Embraer fleet. Blackbird had secured aircraft ranging from the 70-seat Embraer 170 to the 120-seat Embraer 195.
Eargambram said while Embraer jets seated fewer passengers, it would make it easier to maintain viable load factors.
The conclusion of the section 311 offer or scheme of arrangement proposed by the liquidators hangs in the balance as the standoff between the airline's liquidator and founder Vernon Bricknell continues.
Under 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.
At issue is Blackbird's undertaking to honour unredeemed tickets by issuing vouchers to be used to issue new tickets to the revived Nationwide. The tickets must be reused within a year of the airline starting up again. But Blackbird is considering revising this to six months.
John Cameron, attorney for the Vernon Bricknell Trust, which holds shares in the four Nationwide companies (Nationwide Airlines, Nationwide Charter, Nationwide Maintenance and Nationwide Support), said the trust wanted Blackbird to underwrite the R71m in unused tickets with a bank guarantee.
If Blackbird was unable or unwilling to provide the guarantee, the trust would not sign over any shares, which is central to the success of the scheme of arrangement.
Eargrambram said Blackbird would not agree to the guarantee. "With the surge in the fuel price, Nationwide's ticket liability has risen 30%-40% in real terms. Also, Nationwide never guaranteed its tickets before it went into liquidation. Why should we now have to carry that burden?"
Cameron said that if no guarantee could be provided, the trust would want R3m-R4m for the shares in Nationwide Support. "Subsequent to the liquidation of Nationwide Support, we have had huge demand for the assets of the company, and we believe it still holds value," said Cameron. Nationwide Support provided the ground handling of Nationwide.
Haroon Laher, attorney for Nationwide and a director of law firm Glyn Marais, said the scheme of arrangement was the last and best option left to the liquidators. "If this scheme fails, then we will have to proceed to final liquidation, which will leave the creditors and ticket holders poorer."