South African Airways Creditors to Meet Over Lack of Funding
South African Airways Creditors to Meet Over Lack of Rescue Cash
South African Airways creditors have been called to a Friday meeting with the state-owned airline’s administrators to discuss options for the carrier in light of a lack of funding from the government to resume operations.
The National Treasury said in July it would help “mobilize” the more than 10 billion rand ($611 million) needed for SAA restart flights six months after planes were grounded to help curb the coronavirus. Finance Minister Tito Mboweni said at the time the cash should come from private investors or partners, and while the government has said it’s talking to suitors no deal has been agreed.
The state “is working with transaction advisors to assess proposals from several potential strategic equity partners for the airline,” a spokesman for the Department of Public Enterprises said in a statement on Thursday.
The administrators will update creditors on SAA’s financial position at the meeting, according to a letter they sent to affected parties.
SAA has been in administration since December and needs cash to pay severance packages for employees and ticket refunds as well as to simply get off the ground. Domestic flights in South Africa resumed in mid-August for leisure purposes and President Cyril Ramaphosa said Wednesday night that the international border will open from October.
Ethiopian Airlines Group is among companies in talks with South Africa’s government about offering support to the insolvent airline, people familiar with the matter said earlier this month. Africa’s biggest carrier remains in discussions about “how we can work together,” News24 reported this week, citing regional head Abel Alemu. Ethiopian didn’t immediately comment.
©2020 Bloomberg L.P.
