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A&O and ENSafrica lead on South African Airways rescue

South African Airways was placed under a state-led rescue plan on Thursday as part of a massive restructuring following a costly week-long strike last month.

Thousands of South African Airways (SAA) staff walked out on November 15 after the cash-strapped airline failed to meet a string of demands, including higher wages and job in-sourcing.

The strike was called off the following week after SAA management and unions eventually clinched a deal.

But the walkout dealt a severe blow to the debt-ridden airline, which has failed to make a profit since 2011 and survives on government bailouts.

“The Board of SAA has adopted a resolution to place the company into business rescue,” said a statement by South Africa’s Public Enterprises Minister Pravin Gordhan, adding that the decision was also supported by the government.

“It must be clear that this is not a bailout,” said Gordhan. “This is the provision of financial assistance in order to facilitate a radical restructure of the airline.”

South Africa is struggling to get state-owned companies back on track after nine years of corruption and mismanagement under former president Jacob Zuma.

– Costly strike –

Its national airline — which employs more than 5,000 workers and is Africa’s second largest airline after Ethiopian Airlines — had been losing 52 million rand ($3.5 million) a day during the strike.

SAA’s board said the business rescue, scheduled to start immediately, was decided after consultations with shareholders and the public enterprises department “to find a solution to our company’s well-documented financial challenges”.

“The considered and unanimous conclusion has been to place the company into business rescue in order to create a better return for the company’s creditors and shareholders,” said the SAA board of directors in a statement.

Multiple wins for A&O at Global Transport Finance Awards

Allen & Overy took home the headline award, Transportation Law Firm of the Year at the recent Global Transport Finance awards which recognises the leaders in aviation, shipping and rail finance and the most innovative and complex deals in the market.

Global Head of Structured & Asset Finance, Mario Jacovides comments: “We are very proud to be the winner of this year’s Transportation Law Firm of the Year award which recognises the market leading, complex and innovative deals that we have worked on throughout the year across the whole of the transportation sector. This accolade is a further testament to the global expertise we have in aviation, shipping and rail, which allows us to meet our clients’ needs.”

The team also picked up six individual deal awards. They included:

Aviation Portfolio Deal of the Year – advising the secured parties on a USD700m facility relating to the financing and refinancing of a portfolio of 19 aircraft for CDB Aviation;

JOLCO Financing Deal of the Year, Latin America – advising UKEF and ING on the JOLCO financing of a Boeing 787 aircraft which was the first UKEF-supported JOLCO financing to a Latin American carrier;

Cruise Ship Deal of the Year – advising SACE and a syndicate of lenders (BNP, Unicredit) on the pre- and post-delivery financing of two new Fincantieri-built LNG powered cruise ships for TUI Cruises GmbH which are the largest ships ever to have been built in Italy;

Shipping Portfolio Sale of the Year – advising Oak Hill and Värde on the acquisition and USD1bn financing of the Project Lioness portfolio of shipping loans from Deutsche Bank;

JOLCO Deal of the Year, Middle East – advising Investec Bank as junior lender and BNP Paribas and DekaBank as senior lenders on the JOLCO financing of one new Boeing 787-9 aircraft for El Al Israel Airlines which was the first JOLCO financing in Israel and for El Al Israel Airlines;

Tax Lease Deal of the Year – advising the AFIC insurer group on the French Tax Lease financing of a Boeing 787-9 and Boeing 737 aircraft for Royal Air Maroc.

For further information, please contact Susanna Robinson, susanna.robinson@allenovery.com​, on +44 (0)20 3088 3918