SAA given brief reprieve on debt
SAA was last month provided with emergency state funds from the Treasury to repay R3 billion in loans from Citibank amid concerns the airline would default on its payments.
CAPE TOWN - South Africa's state-owned airline SAA has been given until the end of October to settle R5 billion of maturing debt to domestic lenders, although the relief may be extended a further two years, Finance Minister Malusi Gigaba said in a report to Parliament on Friday.
The debt had originally been due to be paid at the end of September.
South African Airways (SAA) was last month provided with emergency state funds from the Treasury to repay R3 billion in loans from Citibank amid concerns the airline would default on its payments.
Gigaba is expected to announce how the government plans to fund the rest of its R10 billion recapitalisation of the airline when he delivers his medium-term budget statement later this month.
Last month, Treasury spokesperson Mayihlome Tshwete said the money was not a loan that is repayable because the government expects the airline to become profitable in future.
“SAA must begin to function as a commercial entity and it’s starting to make those hard decisions right now.”
At the same time, SAA won’t have to repay any of the R10 billion it will receive in guarantees and cash from government coffers this year.