‘Cash-strapped SAA urgently needs fresh cash boost to keep going’
CEO Vuyani Jarana told MPs that of the R10 billion cash injection SAA was given last year, R7.6 billion went to repay loans and R2,4 billion was used for operating costs.
CAPE TOWN - The South African Airways (SAA) new chief executive Vuyani Jarana has told Parliament the cash-strapped airline urgently needs a fresh capital injection to keep going.
The national carrier was given a R10 billion bail-out last year.
On Tuesday, Jarana told the Standing Committee on Public Accounts that while this had eased SAA's financial situation, the state-owned airline is still seriously under-capitalised.
He says SAA’s in talks with banks and National Treasury to secure a revolving loan to keep the airline aloft.
“Keeping in mind that SAA has no credit line, and we have a cash burn – that is, there is a gap between revenue and expenses – we do need access to capital to sustain the operations.
“We’ve been having discussions with Treasury as well as the banks around how we have an open credit line to support, whilst we work through the oversight committee on the fully fledged capital structure for SAA,” Jarana added.
Democratic Alliance Member of Parliament Alf Lees wanted to know how soon SAA would need the money.
The SAA CEO responded: “Now.”
Jarana told MPs that of the R10 billion cash injection SAA was given last year, R7.6 billion went to repay loans and R2,4 billion was used for operating costs.
He says SAA has to pay down a further R9.2 billion in outstanding debt, which becomes due in March 2019.
(Edited by Winnie Theletsane)