Comair delisted from Johannesburg Stock Exchange
South Africa’s Comair has delisted from the Johannesburg Stock Exchange as part of its restructuring efforts. Stocks in the airline had been publicly trading on the exchange since 1998. But with a consortium of seven companies owning 99% of the shares and the airline attempting to fly its way out of financial difficulties, the delisting surprised no one.
The delisting on Wednesday, April 7, also clears the way for Comair to apply for a US$6.9 million loan under the South African Government’s Loan Guarantee Scheme. Comair can use that money for operational expenses, such as salaries, rent and lease agreements, and contracts with suppliers. The loan is not available to listed companies.
Comair attempts to fly its way out of COVID-19 fuelled woes
Simple Flying has extensively covered the problems facing Comair and the South African aviation industry. The airline industry in South Africa and across much of wider Africa was in trouble before the onset of the global travel downturn last year. COVID-19 brought the structural and financial problems dogging African airlines like Comair into the spotlight. In March 2020, Comair suspended its flying. In May, the airline announced it was going into a formal business rescue program.
“Comair remains solvent,” said CEO Wrenelle Stander at the time. “This is a necessary process to ensure a focussed restructuring of the company takes place as quickly as possible so we can take to the skies again as a sustainable business and play our part in the county’s airline industry.”
In December, Comair resumed flying. The airline also reintroduced domestic British Airways’ routes it previously operated. Comair operates two brands, the low-cost carrier Kulula brand, and the full-service British Airways brand. The airline uses the British Airways brand under license. In the lead-up to resuming flights, Comair found new backers who pumped cash into the airline in exchange for a 99% ownership stake in Comair.
Delisting decision made, Comair keeps flying
According to the latest status report on the ongoing business rescue, Comair was asked by the Johannesburg Stock Exchange to decide whether to stay listed or not. The status report of March 31 says;
“(Comair) is not in a position to either comply with the JSE Listing Requirements and/or able to take the necessary and appropriate steps to do so with the objective of reinstating its listing. (Comair) can now apply for funding in the sum of R100 million ($6.7 million) under the COVID-19 Loan Guarantee Scheme put in place between the South African Reserve Bank and large commercial banks. The COVID funding is critical to the Company’s survival.”
With South Africa having recorded over 1.5 million cases of COVID and some highly infectious strains emerging from the area, travel to, from, and within the country has been restricted for much of the past year. The South African Government now permits some travel into and around South Africa. That includes travel to over 20 airports within South Africa.
“We were hurt by the lockdown during the second wave of COVID-19 infections in South Africa from the beginning of January until mid-February. But we are seeing a strong pickup in traffic in March’ with load factors of over 75%. We are currently operating 17 aircraft,” South African news site fin24 reports newly installed Comair CEO Glenn Orsmond saying.
Comair will stay a public company. The controlling stockholders will soon make an offer to purchase the remaining 1% of stock held by minority shareholders.
