Government rejects SAA's R10bn request for more funding

By ANA Reporter Time of article published Apr 15, 2020

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JOHANNESBURG  - The government has rejected troubled national carrier South African Airways' request for R10 billion in additional funding, telling its business rescue practitioners it does not have the resources.

The practitioners told SAA's creditors that the government also refused to raise funding for the airline in foreign capital markets, Business Day newspaper said.

The paper said the practitioners were “assessing the impact of this development on the business rescue process".

In a letter dated April 10, the department of public enterprises said the government could not provide more funding to sustain SAA's business rescue process and would also not provide any further guarantees to the airliner to facilitate borrowing.

The government placed SAA under business rescue last December, with Public Enterprises Minister Pravin Gordhan saying this would allow SAA to continue operating in an orderly and safe manner and keep planes and passengers flying. 

In its 2020 budget tabled in February, the government, which has over the years ploughed billions of rand into SAA to try and prop it up, allocated R16.4 billion to settle guaranteed debt and interest at the airline.

The carrier's woes have been worsened by the Covid-19 global pandemic which has virtually grounded air travel in many countries.

On Wednesday the opposition EFF, which has been critical of Gordhan's handling of the crisis at SAA and other financially troubled state entities such as power utility Eskom, accused him of driving the "deliberate collapse of SAA".

"Gordhan has done this by creating an environment of fiscal uncertainty and arrogantly dismissing advisory measures provided by appointed business rescue practitioners," the EFF said.

"It is therefore clear that Gordhan has no intention of rescuing SAA or protecting the incomes and livelihoods of its employees. He has no appreciation for the need for a domestic airline owned by the state."

- African News Agency (ANA) 

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