New, R5bn debt crisis looms for South African Airways
Conditions of banks' last extension that Treasury provide SAA with R3bn by end-September to repay Citi and provide working capital of R1.2bn
South African Airways (SAA) will face a new debt crisis at the end of October when the repayment of loans of R5bn made by domestic banks falls due on the last day of the month. The Treasury has already bailed out SAA twice since June: first to repay a Standard & Chartered loan of R2.2bn and then to repay a Citibank loan of R1.76bn. Both had refused requests to roll over their loans to the airline. The news that domestic funders have also set a deadline for repayment, subject to certain conditions, comes a day after it emerged that the Treasury has abandoned its plan to sell its R13bn stake in Telkom, which had been intended to fund SAA’s debt and capital requirements. A question now hangs over how the funds for SAA will be sourced as the government has committed to assisting state-owned enterprises in a “deficit-neutral way”, which precludes the option of raising additional debt funding. The details of the arrangements with domestic banks are contained in a report to Parliament by F...
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