Comair was placed in provisional liquidation by the Gauteng High Court (Johannesburg) yesterday, reports Fin24. The liquidation is necessary for Comair to preserve its fleet of aircraft, valued at about R3.5bn, for the benefit of creditors, according to the company's business rescue practitioners (BRPs).

All affected parties have until 26 July to provide the court with reasons why the provisional liquidation order should not be made a final order.

Comair cannot pay aircraft storage, maintenance and insurance costs, so it cannot ensure the preservation of its fleet. That is one of the reasons why its BRPs made an urgent High Court application for its liquidation.

BRP Richard Ferguson said there was no longer a reasonable prospect of rescuing Comair.

‘The company does not have access to any further funding necessary to fund its operational costs and cannot meet any of its obligations towards its funding creditors and trade creditors.’

Court documents show that Comair had a net loss of almost R500m for the year to end-February 2020, compared to a net profit of almost R900m for the prior year.

Its total debt had increased from R2.2bn at the end of June 2015 to R4.9bn at 31 December 2019. Its debt burden had been growing partly because of a disastrous order of Boeing 737 Max planes.

Full Fin24 report