Nedbank is the institution with the biggest exposure to Comair, amassing nearly half of the total of R4bn the airline owed to creditors when it filed a court application last week to wind down its operations and liquidate its assets, reports BusinessLIVE.

In court papers as part of the provisional liquidation application, which was granted on Tuesday, business rescue practitioners put Nedbank at the top of the list with at least R1.7bn in money owed by Comair.

The assets of Comair, the collapse of which was triggered by failure to secure R500m in cash, are mainly 15 aircraft with a total value of about R3.4bn, some of which were financed by Nedbank.

Nedbank, alongside Absa, which is owed R346m, will be first in line to get all or a portion of their money back as their debt ranks highest as per SA’s insolvency rules.

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Comair was undercapitalised and incurred huge losses during its business rescue.

That’s according to aviation economist Joachim Vermooten who said the company’s financial position – as per its draft balance sheet at the end of April – reflected a very low level of net equity of R84m in comparison to the book value of liabilities of R3.971bn.

This excludes liabilities relating to Comair's agreement with US aircraft manufacturer Boeing for the purchase of its 737 MAX planes.

Fin24 reports that Comair is fighting a legal battle in the US to try to get out of the agreement.

It is still too early to say how much Comair's creditors will get back if the company's provisional liquidation is made final.

Comair's business rescue practitioners reportedly told Fin24 on Wednesday that a liquidator first needed to be appointed.

Full report on the Fin24 site