The government’s communication had the support of National Treasury but the timelines and mechanisms for the funding were yet to be finalised.
JOHANNESBURG – The South African government has told administrators of South African Airways (SAA) that there is a “clear cabinet commitment” to provide the state airline with R10.5 billion ($650.7 million) of funds, one of the administrators said on Friday.
The administrator told an SAA creditor meeting that the government’s communication had the support of National Treasury but the timelines and mechanisms for the funding were yet to be finalised.
This comes after SAA called for an urgent creditor meeting on Thursday which took place on Friday, as funding for the airline’s restructuring has not been received as anticipated.
Last Friday, it appeared that plans for the new-look SAA were heading for more turbulence as business rescue practitioners (BRPs) gave the government until this week to fund the rescue process or face liquidation.
SAA rescuers Les Matuson and Siviwe Dongwana last Thursday warned that the government had until this week to determine whether to continue with rescuing the airline as its existing funds were near depletion.
“The remaining portion of the short-term funding required by the company has not yet been made available to the company,” the rescuers said.
“The BRPs have been engaging tirelessly with the government to ensure that this funding is made available to the company timeously.”
SAA has been finalising the termination of 33 of the 40 aircraft leases by the end of September to ensure that it does not have overly burdensome and unsuitable contracts.
In terms of the SAA rescue plan, the airline needs at least R10 billion in short-, medium- and long-term funding for it to take to the skies again.
Reuters / Business Report