Treasury throws R3bn at SAA to avoid costly Citibank default
In a statement on Friday the Treasury said the money will be transferred from the National Revenue Fund to help SAA with its "immediate working capital requirements"
The government has again come to the rescue of the financially crippled South African Airways (SAA) with a bailout of R3-billion. SAA will repay its Citibank debt of R1.8-billion and will use the rest as working capital. In a statement on Friday the Treasury said the money will be transferred from the National Revenue Fund to help SAA with its “immediate working capital requirements” and to avoid defaulting on their Citibank loan. “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 a future Parliamentary appropriation of funds. The due process laid out in the legislation will be followed. “A default by the airline on the R3-billion would have triggered a call on the guarantee exposure totaling R16.4- bill...
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