South African Airways needs short-term funding from the government by the end of next week to continue operating, its business rescue practitioners (BRPs) said in a statement on Thursday (10 September).
In terms of its business rescue plan there is short-, medium- and long-term funding that is required, it said.
“The BRPs have been in engagements with government regarding the procuring of this funding and to date government has advanced approximately R9.3 billion for the repayment the company’s various lenders as set out in the plan.”
The business rescue practitioners said that the remaining portion of the short-term funding required has not yet been made available. SAA and the BRPs said they have been engaging tirelessly with government to ensure that this funding is made available timeously.
“In the ongoing engagements on this issue, the government has continued to express its commitment to making this funding available and have undertaken to do so during the course of next week,” the BRPs said.
The business rescue practitioners said that the existing funds which are available for operational expenditure are ‘near depletion’. This means that the availability of the requisite funding to the company during the course of next week will determine whether the business rescue proceedings can continue, the BRPs said.
“The BRPs will advise affected persons on 17 September 2020 of the progress of the advancing of the funding.
“Should the BRPs not be satisfied that sufficient progress has been made for the timeous advancing of the funding, a meeting of creditors will be convened on 18 September 2020 at 11h00 to engage with affected persons on this issue and the proposed way forward taking into account all relevant factors.”
Bloomberg has reported that the Ethiopian Airlines Group is among companies in talks with South Africa’s government about potentially offering support to SAA.
Africa’s biggest carrier is considering ways to help bankrupt South African Airways fly again after more than five months of dormancy, said the people, who asked not to be identified as the talks are private.
Taking a stake in the carrier is one of the options under discussion, they said, though negotiations are ongoing and an agreement may not be reached.
South Africa needs to raise more than R10 billion to revive SAA, according to a rescue plan compiled by administrators and backed by both the state and labour groups.