Rossair

[exjet]

Picked this up from Business day. Anyone got the facts!!


Financial Services Correspondent

A LIQUIDATION bid is believed to have been launched against a division of RossAir, with implications for six banks owed R250m by the flight specialists.

RossAir is one of the largest privately owned South African aviation companies, ferrying people within SA and across borders on either a contract or charter basis.

But, with most of its contract deals inked in dollars, RossAir's acting CEO Lance Brogden said RossAir Contracts had taken a knock due to the rand's 30% gain against the dollar in the past year.

Although sources said a bid to liquidate RossAir Contracts was launched by a creditor this week, Brogden was unaware of this.

"No papers have been served on us, but RossAir Contracts is in a very tough spot at the moment, no doubt about that."

He said the squeeze on Contracts "makes it tight for the whole company, but we are looking at ways of restructuring the business".

However, Brogden stressed that the other divisions, including its executive air charters, were doing well.

Two banks, Investec and Imperial Bank, refused to comment.


Oct 23 2003 07:34:50:000AM Rob Rose Business Day 1st Edition

[ZFT]

Just received a communication that an application has been brought for the liquidation of Ross Air Contracts (PTY)

Can anyone confirm?

[Sir Cumference]

I have heard the same rumour however it is just that, a rumour but that is what this forum is for. Operators who have enjoyed years of "the falling Rand" are struggling with the concept that the currency has strengthened by 30% recently. This in effect is a 30% reduction in income for those who earn the US currency. The effects are devestating and the SA offshore contracting companies are all battling to make ends meet. The Rand is the major culprit, however time will tell!

[Douglas Racer]

What!!! Is this a deafening silence I detect on the Western Front!!! I thought that by now all the regular Rossair-bashers would've been going at this thread hammer and t(h)ongs!? Must all be too busy flying in "real" aircraft for "real" airlines, earning "real" money?

If this is going to happen then it is a sad day for aviation in this country, since this airline has been instrumental in getting many Rossair- bashers further along their career paths, despite its failings, (which are only too inherent/evident in many other airlines).

[Sir Cumference]

Figures that are being discussed seem to be in the magnitude of R500M and maybe more!! It seems that the word is out in the industry that there is BIG trouble in the camp. The knock-on effect of an operator as large as Rossair shutting down is going to have ramifications throughout the local charter and airline industry as well as the international relief community. Very, very sad and we wish them well in their efforts to keep the show going.

At Lanseria, Transafrican Aviation has had its doors closed. Whilst none of us want a 'Zimbabwean currency' the strong Rand is killing a lot of SA industry and the aviation side is being extremely hard hit. Fingers crossed for things to turn around!!

[blueline69]

Yes , yes. I'm sure that there are many company's that would love to see "Roseair" fail. Lets not beat around the bush , they are taking a little strane yes , as many others are to , but the figures from above are completely blown out of proporsion. Rossair will be around for some time still.

:ok:

[GGG]

Well my whole family are in the banking industry, all with different institutes. And was informed that they owe Nedbank R60m, FNB +-R130m and ABSA a few hundred million rand, and there were a few other banks being owed and there are other companies linked with them that could also be shut down and that they are all vying for liquidation at this point. But I do honestly hope that they can continue to operate or at least be bought out and allowed to carry on.

[orgasmotron]

All I can say, sad day in aviation again. I have never flown for Rossair although I have applied there a few times in the beginning of my career. The sad thing is, in SA we need all the aviation jobs possible. We need every airline who starts to succeed. Every charter company (Note, not crew and aircraft agent) who trains and employs crew helps in building a healthy commercial avaition sector, needles to say, they need to survive.

Some people seems to get an endless amount of pleasure in the demise of a small company. Overheard an employee of our national carrier remark "These small airlines must all close down, they are dangerous, unproffessional and just ripping our clients away" What an idiot ! Was he born in a spoories seat or what ?

I hope somebody helps them out in order for them to continue. Its not just the pilots, its groundstaff, engineers suncontractors etc. Its a whole chain of "nothing good for aviation".

Vasbyt guys !!!

[Tokoloshe]

Hey Bwana Fred, agree with your sentiments exactly..!
Really do hope they don't go under. lot of good guys there. Certainly helped me up the ladder in the long run.:ugh:
Does anybody know the latest score on this issue...?

[Coleman Myers]

Sad times for the men and women of ROSSAIR if a way around this cannot be found. AFRICAN AVIATION will loose another great institution where many crews truly earned their wings.

[Gunship]

Oh no ! :uhoh:

Fred and co ... I am very sorry to hear this !

Really hope things turn around for the better.

Yes this side a bleak Xmass as well .. previous year or two Xmass was held with Rand at 12 to 13 !

Now less than R7 .. eischhh anybody got any Xmass pressie's for my kiddo's :{

All the best Rossair - hope you guys "make" it ! :ok:

[maxrated]

The latest points/ observations on Rossair situation

In my( limited bussiness) experience it is very unlikely that a company the size of "Rossiar contracts" ( charter / engineering and Avionics are not part of the liquidation deal) would ever be liquidated as the banks , collectively owed R 250 mill, would never even recoup even half of their money given the current Rand value of the aircraft, (if they did their losses would probably be large enough to drop share prices and subsequently have the banking peoples heads roll)

The inherent value of the company lies in the value of the company's contracts , which are numerous and by all accounts are still running well, even though they're in U$$ revenue wise. So the banks would keep these going along with pilots and engineers.

It will be important for the banks or potential liquidators to keep the pilots and engineers salaries coming timeously as contract aircrew being what they are, the merest hint of the guys not getting paid under the circumstances will result in abandoned contracts and aircraft all over africa and the middle east, which would not be in the bank/clients/liquidators interests at all.
But this is an absolute worst case scenario.

Even If liquidation proceedings went ahead the company would probably only be put into provisional liquidation, in other words the banks take over the running and ownership of the company and employ some of their own people to sort it out. this would most likely involve a management restructuring of some sort and with any luck, some good financial managment who have peronalities and who dont view their pilots as "the enemy".

Other cost cutting measures will surely be implemented and could involve retrenchments of non-essential staff and facilities.

At the moment it seems like the whole liquidation thing has gone quiet and the banks have come to some sort of agreement amongst themselves to lay off the pressure for a while.

Rumor has it that it was First Rand (FNB) that applied for the liquidation in the first place., though they are owed the smallest portion of the money owed between all the banks.

INVESTEC bank then made a deal with them that Investec would stand surity for the money owed to First Rand ( R80 Mill )and Investec would take over the current chairmans shares and run the company.

By doing this they have definately acquired the most dynamic and skilled bunch of contract aircrew/engineers and operations people on the continent, lets hope they can sort out the fiscal (mis)management and they'll have a winner company.

Currently a new CEO has been appointed who has a good record of turning company's around and who by all accounts seems like a really super chap, although I've only met him briefly.


I think that the whole liquidation thing was blown out of proportion , after all it was only an application. Those Rossairians who remember when Rossair lost DHL west africa contract will remember the mayhem and mass hysteria that fizzled into nothing within 3 weeks and it was all bussiness as usual on other contracts shortly thereafter. Ditto the current situation at the moment.

I wish that management would issue us plebs at the bottom of the company information chain with some usefull information
possibly veryfying or correcting the info that I have written above.
The last spin-doctored internal memo to the staff apart from being uninspiring,stimulating or credible, was more watered down than boarding school soup, we are not so stupid as to accept that at face value, infact a wholly inacurate article in a Jo'burg news paper gave us more information on the situation than anything issued by management ( poor show chaps).

I'm quite certain that Rossair pilots and engineers will come through this ok, after all we're damn good at our jobs ! we run good operations better than our competition, and everyone knows this !!!

"What doesnt kill you makes you stronger !!!"

ROSSAIR 4 EVER !!!





:} :} :} :}