THE rationale behind MillionAir Charter's recent sale of upmarket Sun Air to Pretoria-based risk consultants CIRC was to have been borne out by a R30m after-tax loss reported by the charter company on Friday.
MillionAir said it intended to get back to its core business of leasing aircraft but its results for the year to the end of February reflect the huge capital spent in trying to get Sun Air off the ground.
Besides writing off R15m as a result of the sale of Sun Air to CIRC, MillionAir's financial position appears fragile.
Although auditors Taback Pelkowitz & Berman did not qualify their audit opinion, they said the ability of MillionAir to continue as a going concern was "dependant on a number of factors", including the continued financial support of its major shareholders.
The auditors were concerned because MillionAir's current liabilities exceed its current assets. The company said part of its reason for selling Sun Air was to enable the carrier to get access to "significant funding" to finance its operations.
In light of the capital it ploughed into Sun Air, MillionAir was perhaps understating its experience by calling its Sun Air foray a "tremendous challenge".
Although no longer the owners of Sun Air, it appears that MillionAir is still hoping to make money out of the carrier.
Not only did it take 10% of CIRC to maintain a diminished ownership interest in Sun Air, but it also tied up a three-year lease contract worth about R80m with CIRC.
This agreement will see CIRC lease all aircraft for Sun Air from MillionAir for three years.
May 19 2003 06:42:50:000AM Rob Rose Business Day 1st Edition
Monday
19 May 2003
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