Wrap Text
Cautionary Announcement
Comair Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1967/006783/06)
ISIN: ZAE00002983
Share Code: COM
(“Comair” or “the Company”)
CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the interim results announcement for the 6 months ended 31
December 2019 released on SENS on 26 February 2020 (“the Announcement”) wherein
shareholders were advised that, mainly as a result of South African Airways going into
Business Rescue and failing to pay Comair an amount of R790 Million (Net R505 Million),
the Company made an operating loss for the period of R562 million.
In terms of the Announcement, operating expenses had increased by 13% to R3.6 billion
(prior period: R3.1 billion) as a result of significantly higher fleet and maintenance costs, as
well as the grounding of the 737 MAX 8 aircraft.
Since the Announcement, the entire world has been affected by the COVID 19 outbreak and
lockdown measures imposed by national governments to combat this virus.
Comair welcomed the decisive action taken by Government in curbing the impact of COVID
19 on all South Africans. Of primary importance is the health and well being of our staff and
their families as well as our customers.
For the period 17 March to 30 April 2020, in terms of the lockdown, Comair has been unable
to operate. Comair has however been monitoring the information released by Government
closely. However, in terms of Governments latest requirements for the gradual upliftment of
the lockdown in terms of a five-level risk assessment process, it appears that restricted air
travel will commence at Risk Level 3, full domestic air travel at Risk Level 2 and regional and
International air travel at Risk Level 1. The level of the prevailing COVID 19 risk will
determine the progression from Risk Level 5 to Risk Level 1. In terms of the Governments
requirements, it is not anticipated that Comair will commence operating prior to October or
November 2020.
Throughout this challenging and uncertain time, management has been working tirelessly to
secure and manage the business effectively by implementing a turnaround process focusing
on cash preservation, cost cutting, disposal of non-performing assets and a strengthening of
the balance sheet, working with external re-structuring advisors to reduce costs, preserve
short term liquidity as well as the restructuring of the balance sheet for long term
sustainability. However, since the imposition of the lockdown, there has been no revenue
generated by any of the business divisions. Actions to date include:
• Finalisation of Phase 1 of the two phase s189A process, resulting in a decrease of
the number of executives, with a cost reduction of R23 million;
• Initiation of Phase 2 of the Section 189A process to reduce the number of staff
overall;
• Mutual termination of the STAR Air Cargo transaction was cancelled;
• Disposal of the Course Restaurant;
• Closure of SLOW in the City;
• Active engagement of Boeing on the cancellation of the 737 MAX 8 orders and
payment of compensation relating to the grounding of the 737 MAX 8;
• Participation in industry initiatives to lobby Government for special aid for the airline
industry; and
• Negotiations have commenced with the banking industry for the purpose of securing
bridging finance. These negotiations are ongoing. The possibility of raising additional
equity capital via a convertible preferred share or convertible loan note issuance is
being investigated.
Although, the Company was experiencing financial headwinds prior to the COVID 19
outbreak, the five week lockdown has caused the situation to rapidly deteriorate to a point
where the Company finds itself in a very difficult financial position and shareholders are
advised to exercise caution when dealing in the Company’s securities until a further
announcement is made.
Bonaero Park
30 April 2020
Sponsor
PSG Capital
IMPORTANT NOTICE TO FOREIGN SHAREHOLDERS AND PROSPECTIVE INVESTORS
FOREIGN SHAREHOLDERS AND PROSPECTIVE INVESTORS IN COMAIR LIMITED (“COMAIR”) SHOULD
NOTE THAT, IN ORDER TO ENABLE COMAIR (AS A LICENSED AIR SERVICES OPERATOR IN SOUTH
AFRICA) TO REMAIN COMPLIANT WITH THE FOREIGN OWNERSHIP RESTRICTION CONTAINED
SECTIONS 16(4)(c) AND 19(a) OF THE AIR SERVICES LICENSING ACT, NO. 115 OF 1990, THE VOTING
RIGHTS OF FOREIGN SHAREHOLDERS MAY BE DECREASED PROPORTIONATELY SUCH THAT THE
VOTING RIGHTS OF FOREIGN SHAREHOLDERS DO NOT, IN AGGREGATE, EXCEED 24.99%. FOREIGN
SHAREHOLDERS AND PROSPECTIVE INVESTORS ARE REFERRED TO THE COMAIR’S MEMORANDUM
OF INCORPORATION AND WEBSITE (www.comair.co.za) FOR FURTHER DETAILS. IF FOREIGN
SHAREHOLDERS OR PROSPECTIVE INVESTORS ARE IN ANY DOUBT AS TO WHAT ACTION TO TAKE
THEY SHOULD SEEK ADVICE FROM THEIR BROKER, ATTORNEY OR OTHER PROFESSIONAL ADVISER.
Date: 30-04-2020 10:49:00
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