SAA in talks with Treasury, banks for fresh cash injection

SAA CEO Vuyani Jarana says the R10 billion bail out from government last year eased SAA’s financial position somewhat, but that it needs more money.

FILE: An SAA aircraft. Picture: AFP

CAPE TOWN - South African Airways is in talks with banks and National Treasury for a fresh cash injection to keep the state-owned airline going.

New CEO Vuyani Jarana says that SAA needs about R5 billion.

Last year, the government gave SAA a R10 billion bail-out.

SAA’s board and executives met with Parliament’s Standing Committee on Public Accounts (Scopa) on Tuesday.

SAA CEO Vuyani Jarana says the R10 billion bail out from government last year eased SAA’s financial position somewhat, with R7.6 billion used to pay off loans and R2,4 billion for operating expenses.

But he says that the national carrier’s balance sheet remains weak, and that it needs more money.

“There is debt that has accumulated over years, which today stands at R9,2bn, but obviously there are working capital requirements because the revenues of SAA are not able to cover its costs, which means every month that you’ve got a gap in terms of funding the operations.”

The R9.2 billion comes due for repayment in March next year.

Jarana told the committee that he and a number of executives became the target of threats in December, when they started acting on reports of forensic investigations into suspected wrongdoing at SAA. He says the contract to provide the necessary security was issued after due process was followed and that the reported cost of R35 million is incorrect.