SA Express scrambles to extend R640m in loans to avoid debt default
Loss-making state-owned airline SA Express is in last-minute negotiations with banks to extend R640m in loans, which fall due at the end of November. If SA Express were to default on its debt, the government would have to settle it under the guarantee it has extended to the airline, which was allocated a R1.249bn bailout in the medium-term budget policy statement. This is the amount of debt it has raised against its government guarantee of R2.8bn. Avril Halstead, the acting deputy director-general for transport enterprises at the department of public enterprises told parliament’s two appropriations committees on Friday that engagements with banks were under way to extend the loans for a couple of months in case the money allocated by the budget policy statement did not flow through in time. The remaining debt was staggered over seven years, but the department wanted to have an upfront payment of the debt because some of it was at high interest rates. Finance costs for the 2018/2019 ...
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