SAA scrambling to get R2bn as deadline looms

SAA scrambling to get R2bn as deadline looms - source

News24
09 Nov 2019, 04:14 GMT+10

South African Airways is apparently scrambling to obtain R2bn before November 20, a sourceis different to a "bailout" where government would simply give SAA the money.

Jammine said it could be that a lot of short-term SAA loans might be expiring, leading to an inevitable scramble to deal with it by lending more money.

"In the broader scheme of things, R2bn is not a huge amount of money if you compare it to Eskom's R450bn debt of which the SA government is willing to guarantee R200bn," he said.

"However, it does show that SAA is not generating enough money from its own operations and that is serious and should be addressed. It is running a decent operation, but not making money. So, ultimately it becomes short of cash. It highlights that some kind of restructuring is needed to get SAA to become profitable."

Mboweni echoed this view in his mini budget, describing SAA as "insolvent" and unlikely to "ever generate sufficient cash flow" from operations in its current configuration. The finance minister also said he welcomed "conversations" between the flag carrier and potential equity partners.

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