SAA gets R3bn bail-out to repay CitiBank debt
The bail-out averts a default, as CitiBank refused to extend the repayment deadline on its loan to the mismanaged airline
Government has approved the transfer of funds from the National Revenue Fund to bankrupt airline South African Airways so that it can meet its debt obligations and avoid a default of R3bn. Of the R3bn transferred to SAA, R1.8bn will be used to repay loans due at the end of this month and R1.2bn for working capital. Citibank refused to extend the full amount of its R1.8bn loan which falls due at the end of the month. In total R6.8bn in loans mature on Saturday, and Treasury has been in intensive negotiations with lenders for this to be rolled over. Treasury said the amount transferred would also assist SAA with its immediate working capital requirements. “This payment was done in terms of section 16 of the Public Finance Management Act. This section of legislation states that the minister can authorise the use of funds to defray expenditure of an exceptional nature which is currently not provided for and which cannot, without serious prejudice to the public interest, be postponed to ...
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