SAA business rescue practitioners plan way forward after government cuts off funding
The SA government says it won't provide additional funding to sustain SAA's business rescue process
SAA business rescue practitioners plan way forward after government cuts off funding
South African Airways’ (SAA) business rescue practitioners are assessing the impact of the government turning down a request for R10bn ($534.8m) in extra funding.
On Tuesday, the business rescue practitioners received a letter from the Ministry of Public Enterprises stating that the government would not support an extension of the foreign currency borrowing limit to permit foreign financing of the business rescue plan.
The ministry said the government was unable to provide additional funding to sustain the business rescue process, or for a care and maintenance budget as proposed by the business rescue practitioners.
“It is for this reason that we as the business rescue practitioners are providing the necessary and critical update to all the affected parties.
“We are assessing the impact of this development on the business rescue process and will communicate any decisions to be made in due course,” the practitioners, Siviwe Dongwana and Les Matuson, said in a note to creditors.
The practitioners said that, in the interim, the company was conducting charter operations for the repatriation of foreigners to various countries and to fly South Africans stranded in foreign countries home.
“In addition, the cargo division has increased its activity during this time, including bringing into the country critical medical supplies and equipment necessary for the fight against the Covid-19 virus.”
The practitioners, who were appointed in December 2019 when the company was placed into voluntary business rescue, said government had announced R4bn (213.9m) would be made available for post-commencement finance (PCF) to, among others, provide for the company to trade up to January 31 2020.
