Govt commits in letter to obtain funding for SAA
The Departments of Public Enterprises and Finance outlined the pledge in a letter on Wednesday evening to SAA's business rescue administrators.
JOHANNESBURG - The Departments of Public Enterprises and Finance have told South African Airways’ (SAA) business rescue administrators that government had committed to mobilising funding for the short, medium, and long-term requirements of the airline.
The ministries outlined the pledge in a letter on Wednesday evening.
In the letter, signed by Public Enterprises Minister Pravin Gordhan and Finance Minister Tito Mboweni, the ministers said that they acknowledged the funding requirements set out in the restructuring plan and were committed to mobilising funds for what they called “a viable and sustainable national airline.”
DPE WELCOMES COMMITMENT TO SOURCE FUNDING AND SUPPORT NEW SAA pic.twitter.com/HdMfVXlSIW— DPE_ZA (@DPE_ZA) July 16, 2020
It was estimated that more than R10 billion would be needed to fund the plan, clean up, and stabilise the balance sheet of SAA.
The money would also be used to restructure the rest of the group entities that were not in business rescue and create a stable and viable platform for a new restructured national airline.
The commitment letter signed off by Gordhan and Mboweni gave effect to Cabinet’s endorsement of a business rescue plan for SAA.
Cabinet believes that a positive vote from creditors to finalise the business rescue process was still the most viable and expeditious option.
The Department of Public Enterprises also welcomed the interest of local and international investors to provide the new airline with technical, financial, and operational expertise.