South African Express (SA Express), which is currently battling former supplier Ziegler SA in the Gauteng High Court, is facing a new twist in its legal proceedings with the global logistics company which is now looking to have the airline's board members personally pay legal costs resulting from the ongoing hearing, online newspaper Daily Maverick said citing court documents. Ziegler SA, which is owed ZAR11.3 million (USD770,000), is asking the court for SA Express to be placed in business rescue due to the fact it is technically insolvent and is unable to pay its debts.

The 12-member SA Express board might have to pay legal fees out of their own pockets for opposing the urgent business rescue application which Ziegler deems "reckless." In court papers, the firm's managing director, Charl Du Toit, said the airline’s decision to challenge the application was “without a doubt instigated by its board of directors.”

He continued: "The directors of SA Express, as directors of a state-owned company, owe a duty to SA Express and its shareholder (the government), to make efficient, economic and effective use of its resources, and to ensure good governance through efficiency and accountability.”

Ziegler SA believes that the carrier's executives have an opportunity to return SA Express to profitability and avoid its implosion if it acts quickly by placing the company into business rescue. The airline would be able to stay operational while being restructured and temporarily permitted to suspend debt payments. Failing this solution, the logistics firm is calling for the airline's liquidation and subsequent sale of its assets to pay off its debts.

In response, the airline's legal team said that Ziegler SA's call to impose a personal cost order "came from nowhere" as “board members have not been individually cited in Ziegler SA’s court papers.” It also added that it did not know where SA Express' shareholder - the South African government - would find the additional funds to allow the start of the business rescue process.

In court papers seen by the newspaper, SA Express is set to receive ZAR164 million (USD11.2 million) from the government during FY2020/21, in addition to the ZAR1.2 billion (USD82 million) it received in February 2019, which was then topped up in September last year with another ZAR300 million (USD20.5 million) hand out.

On January 29, SA Express issued a press release on its website saying that South African Airways (SAA) had failed to pay revenues it was owed as a consequence of the flag carrier’s own business rescue status. Its statement continued: "Now that SAA has received funds, the regional airline trusts that finally paying these revenues will be prioritised." The SA Express executive team have been working over the last two months with the SAA business rescue practitioner to resolve this matter. However, with no imminent way forward, the SA Express board is now engaging with the government to resolve the matter."

On January 28, SAA said that it had been given access to an additional ZAR3.5 billion rand (USD240 million) from the state-owned Development Bank of Southern Africa, to help it avert its collapse.