Government officials are working out exactly how much money South African Airways (SAA) still needs from National Treasury in order to settle legacy debt and bring the finalisation of the strategic equity partnership deal with the Takatso Consortium one step closer.
Takatso, chosen as SAA's strategic equity partner already more than a year ago, is not prepared to take on any of the airline's legacy debt. Investment firm Harith and Global Airways, owner of the LIFT airline, are the Takatso partners. Takatso is expected to provide much-needed capital for the airline's continued operations - to the tune of R3 billion over two years.
But SAA
will face liquidation if the strategic equity partnership deal with the Takatso Consortium does not work out, the Department of Public Enterprises (DPE) told Parliament on Wednesday.
The last time SAA received
money from Treasury was R10.5 billion in the Medium-term Budget Policy Statement (MTBPS) of former finance minister Tito Mboweni in October 2020 to implement the airline's business rescue plan. This was less than the R14 billion the DPE had asked for, as it also wanted funding to help SAA's subsidiaries Mango, SAA Technical and Air Chefs.
The DPE then obtained a special allocation from the SAA money for the subsidiaries, leaving a gap in what still had to be settled in terms of the business rescue plan. The R3.5 billion still due to SAA's creditors at the time was placed in a so-called receivership - "a special purpose entity" - in March 2021, to allow for SAA to be regarded as solvent, not carrying significant debt on its books, and exit business rescue.
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