The business rescue practitioners (BRPs) of South African Airways (SAA) have announced that they will receive a total amount of R3.5 billion from the Development Bank of Southern Africa.
The SAA BRPs received this aid with the support of the Departments of Public Enterprises and National Treasury, and said it is sufficient to meet the short term liquidity requirements of the airline for the period until the business rescue plan is published and adopted.
“This plan is required in terms of section 150 of the Companies Act and is the responsibility of the Practitioners,” the SAA BRPs said.
The advancement of these funds follows the business rescue process which began on 5 December 2019, with the local commercial banks providing the initial post commencement funding (PCF) of R2 billion in addition to the existing exposures to SAA.
“Discussions held with financial institutions have been fruitful with the Development Bank of Southern Africa offering to provide the next tranche of PCF, for a total amount of R3.5 billion, with an immediate draw-down of R2 billion,” the SAA BRPs said.
“Furthermore, funding for the restructuring phase after the Plan is adopted is being considered by potential funders.”
According to the statement, the restructuring of the struggling state-owned airline will allow it to develop into a sustainable and competitive business.
The BRPs added that SAA will try to preserve jobs wherever possible during this restructuring process, stating that the airline is a “key strategic asset” serving local and international customers.
“Stakeholders of the airline should now have comfort that the rescue process is on a significantly sounder footing, and that passengers and travel agencies and airline partners may continue to book air travel on SAA with confidence.”