While the main focus has been on the available options and the ultimate outcome of the move, one aspect that is not being talked about is the underlying astuteness of the decision to go the business rescue route.

Choosing business rescue effectively made it someone else’s problem — but I don’t mean this in a negative way. Leaving the experts to handle this is based on sound business rationale. The government is clearly not an expert in business turnaround and especially not in marginal industries such as airlines, which are among the most difficult businesses in which to turn a profit.

In addition to this, business rescue has allowed our government to distance itself from the inevitable retrenchments, which by most accounts are likely to result in some 5,000 to 7,000 job losses. The last thing the government (and particularly Gordhan) want is a protracted battle with the unions.

By putting these negotiations in the hands of the BRPs, the government has neutral, experienced professionals who will lead the process. The independence of the BRPs is a critical component of its governing legislation. Rulings in various court cases have shown that their independence simply cannot be compromised.

(A happy coincidence for the government is that the BRPs will also have to bear the brunt of any negative perception that may result from negotiations.)

Nothing beats a good deadline

It’s also worth noting that one of the many benefits of business rescue is its fixed and urgent timelines.

Creditors are anxiously waiting to hear what options are available and how much of their money can be clawed back; workers are waiting on tenterhooks, wondering if they will have a job; and investors and management are waiting to hear what is to become of their efforts and investments. For all these reasons, business rescue is often a preferred choice because of the inherent urgency with which the process needs to unfold.

In SAA’s case, the government made the best possible move, considering the voters and all other stakeholders had lost trust in their continued and often deeply unpopular efforts to further bankroll a cash-guzzling, inefficient operation. Business rescue puts a nice, neat time frame to everything and generally allays panic.

Finally, if the government does end up being required to sink many more millions of rand into a turnaround plan, a solid team of turnaround professionals, such as they have in place, is the best chance the fiscus has of making some of its money back.

But why now?

It’s worth remembering that SAA is not the only SOE in crisis. What is telling is that the department of public enterprises seems to have rather astutely covered its bases, using the opportunity to watch and learn. While at the state airline the department has put in BRPs, at the Passenger Rail Agency of SA (Prasa) they have put in an administrator, and at Eskom they have a new CEO with a turnaround background and solid credentials.

There is no way of telling if the other options will fail or deliver, but if business rescue works for SAA, the government will have a blueprint for what to do with the SABC, Denel —and any other SOE that may need fixing.

A welcome addition for turnaround professionals is that, should the restructuring of SAA be a success, the realisation of the potential efficacy of the turnaround and business rescue frameworks here and in Sub-Saharan Africa are likely to be remarkable. The region is crying out for expert turnaround and restructuring skills, which, together with foreign investment, are key building blocks for Africa’s economies.

Everyone is watching what transpires at SAA with eager anticipation. If this plan works out, our government will have a very viable blueprint to, at last, make meaningful changes at some of our mission-critical organisations.

• Fleming is a certified rescue analyst and director at Engaged Business Turnaround.