SA Express handed R300m lifeline

Last year, the state-owned entity was granted a R1.2 billion guarantee that it said was swallowed by historic debt.

A general view of an SA Express plane. Picture: SA Express

JOHANNESBURG - SA Express has been thrown a lifeline and will be receiving a R300 million guarantee from Treasury's contingency reserve.

The struggling airline was grounded twice last month after it failed to pay the Airports Company South Africa.

Last year, the state-owned entity was granted a R1.2 billion guarantee that it said was swallowed by historic debt.

National Treasury said it granted SA Express recapitalisation of R300 million through the Department of Public Works.

Treasury said the contingency reserve was revised upwards during budget in February to respond to possible requests for funding from state-owned entities.

The guarantee was a requirement from the banks in order for SA Express to access a R300 million facility.

But this does not mean the company is out of the woods yet.

CEO Siza Mzimela made it clear that some of the money would be used to settle its current debt to ACSA while also working through the historic debt.