Comair agreed a deal with sellers Sundrops Investments, Smashing Star Investments and Marcel Liebenberg last summer for the acquisition. Comair was to pay R75 million ($5.1 million) plus a profit-share payment, capped at R250 million, for the acquisition. The deal also included the option of a one-off R150 million settlement payment.
But in a brief stock market statement today, Comair says: ”Shareholders are now advised that with effect from 31 March 2020, the parties by mutual consent, agreed to terminate the agreement, such that the agreement shall cease to have any further force or effect.”
While no reason has been specified for the deal being abandoned, the airline has been dealing with the impact of the coronavirus crisis on top of a series of existing challenges.
Comair, which operates flights as a British Airways franchise carrier and under the Kulula low-cost brand, has suspended all flights until 19 April during South Africa’s national lockdown. It last month said that for the ”foreseeable future the primary focus will be on restructuring the balance sheet as well as cash preservation”.
Even before the coronavirus crisis, Comair had been dealing with challenges including a difficult economic environment, the grounding of the Boeing 737 Max and additional costs while it transitions to a new maintenance firm.