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SAA still looking for more funding else it says it will go under

State-owned SAA entered a form of bankruptcy protection last month in an effort to rescue the company and 10,000 related jobs.

SourceEWN

JOHANNESBURG – Finance Minister Tito Mboweni on Thursday said government was still trying to find additional financing for South African Airways (SAA).

Mboweni was speaking at a meeting with business leaders in Johannesburg to discuss the message they would be taking to the World Economic Forum in Davos this year.

At the same time, SAA could have to suspend some flights and delay salary payments if the government can’t come up with a plan soon to provide the R2 billion it promised the airline last month, a trade union official said on Wednesday.

State-owned SAA entered a form of bankruptcy protection last month in an effort to rescue the company and 10,000 related jobs. At the time it was promised R2 billion from the government and R2 billion from lenders.

But unions briefed by the specialists appointed to turn around the carrier were told on Wednesday that the government had not yet been able to provide its portion of the funds and that the R2 billion from lenders had been exhausted, National Transport Movement president Mashudu Raphetha told Reuters.

Unions were told SAA’s business rescue practitioners needed clarity from government on the R2 billion of promised funding by the end of 19 January, Raphetha said.

Les Matuson and Siviwe Dongwana, the business rescue practitioners, said in a statement: “We remain hopeful that a mechanism can be found to unlock the liquidity constraints.”

“Government continues to indicate its support for the business rescue process and together we are considering various scenarios to keep the entity operational. … The liquidation of SAA is not one such current scenario,” the statement added.

A public enterprises ministry spokesman was not immediately available for comment.

In a statement on 20 December, Matuson and Dongwana said there was a “reasonable prospect” of rescuing SAA.

SAA is one of several state companies mired in financial crisis after nearly a decade of mismanagement and corruption in Africa’s most industrialised economy.

The national carrier’s case is seen as a test of President Cyril Ramaphosa’s resolve to carry out badly-needed reforms.

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