South African Airways (SAA) said its future is looking “significantly sounder” after reaching an agreement between the South African government, banks and the carrier’s business rescue practitioners.
The airline released a statement yesterday saying: “Discussions held with financial institutions have been fruitful with the Development Bank of Southern Africa offering to provide the next tranche of PCF [post commencement funding], for a total amount of R3.5 billion [£184 million], with an immediate draw-down of R2 billion [£105 million]. Furthermore, funding for the restructuring phase after the plan is adopted is being considered by potential funders.”
SAA said stakeholders “should now have comfort that the rescue process is on a significantly sounder footing”, while passengers and travel agencies can be assured they can continue to book tickets “with confidence”.
The carrier was placed into business rescue, a form of bankruptcy protection, in December after a 2 billion rand loan was agreed with the government.
However, local media reported last week that the government had refused to pay out the extra funding without guarantees, shortly after which SAA consolidated flights on some domestic routes.
With the new round of funding, the airline said it can move on with the next phase of its rescue plan, adding: “The restructuring of SAA will provide an opportunity to develop a sustainable, competitive and efficient airline, with a strategic equity partner remaining the objective of government through this exercise and will result in the preservation of jobs wherever possible. SAA is a key strategic asset which needs to be positioned to provide reliable connectivity to markets within South Africa, the African continent, as well as servicing selected international routes.”
flysaa.com