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Acsa seeks govt guarantees for R11bn in new debt

Since late March when the country went on lockdown, major domestic airports such as the continent’s busiest OR Tambo in Johannesburg have closed, knocking revenue at Acsa.

Airports Company South Africa (Acsa) security measures at a local airport. Picture: Sethembiso Zulu/EWN

CAPE TOWN – The Airports Company South Africa (Acsa) needs Treasury support to finance up to R11 billion ($594 million) of new debt by 2025, the state-owned company said on Monday.

Since late March when the country declared a state of disaster to contain the new coronavirus, major domestic airports such as the continent’s busiest OR Tambo in Johannesburg have closed, knocking revenue at Acsa.

African airlines could lose $6 billion in passenger revenue in 2020, the International Air Transport Association said last month.

“New debt of 10 billion to R11 billion is required in the next five years and this will require shareholder support in the form of government guarantees,” Acsa said in a presentation to lawmakers.

The operator, which also holds concessions at Sao Paulo’s Guarulhos International Airport and Chhatrapati Shivaji International Airport in Mumbai, said about R3 billion in guarantees would be required over the next three years.

Between 2021 and 2023 its capital expenditure budget is seen at R17.9 billion as it develops major projects, such as a new runway and terminal at Cape Town airport, Acsa said.

In March, ratings agency Moody’s downgraded Acsa to Ba1 from Baa3 with a negative outlook as expected passenger traffic was seen falling by at least 30% in the financial year to March 2021.

Struggling state-owned companies including bankrupt national airline SAA and power utility Eskom rely heavily on government bailouts which are straining tight public finances as Africa’s most industrialised economy faces the prospect of a prolonged recession.