Dudu Myeni expects SAA’s loans to be extended now that a CEO was appointed
On Wednesday, South African Airways (SAA) chairperson Dudu Myeni said the appointment of a CEO at the airline met one of the conditions laid down by lenders for the extension of R6.8bn in loans, which mature at the end of September.
Finance Minister Malusi Gigaba recently announced that Vodacom executive Vuyani Jarana had been appointed the new CEO of SAA. He was expected to take up the position on September 1.
Myeni was speaking to MPs in Parliament on Wednesday.
In response to a question by DA deputy finance spokesperson Alf Lees about whether the Treasury had agreed to pay the loans if they were not extended, Myeni said that while SAA had not received confirmation from the lenders that they would agree to an extension, she did not foresee a refusal. Engagements were continuing.
Myeni said one of the issues highlighted by lenders when the loans were extended in June to end-September was the instability in management and the absence of a permanent CEO. As Jarana had been appointed, she assumed the loans would be extended.
She said SAA still had liquidity challenges and had struck repayment plans with suppliers.
Myeni also said negotiations between SAA and the Treasury about the injection of working capital were at an "advanced stage", and SAA was hopeful that it would get state funding.
Deputy Finance Minister Sfiso Buthelezi added that the Cabinet was considering the matter and appreciated the problems faced by the airline, which needed to be recapitalised. The undercapitalisation had forced SAA to rely on borrowings, weakening its balance sheet.
He said the Treasury was committed to dealing with SAA’s problems and would "never allow the airline to go under". The Treasury also did not support the privatisation of SAA.
Buthelezi also said there was "massive" fraud and corruption at SAA, as well as revenue leakage.