SAA enters business rescue, to receive USD270m to support restructure and continued operations

South Africa's Minister of Public Enterprises Pravin Gordhan stated (05-Dec-2019) the business rescue process for South African Airways (SAA) commenced on 05-Dec-2019 and will incorporate the following:

• A business rescue practitioner will be appointed to take charge of the business and operate the airline with the assistance of management;
• Existing lenders will provide ZAR2 billion (USD136.6 million) to SAA as post commencement finance (PCF), guaranteed by the government and repayable from future budget appropriations. The funds will enable the business rescue process to commence and allow SAA to continue to operate;
• The National Treasury will provide an additional ZAR2 billion in PCF "in a fiscally neutral manner";
• Business rescue will not impact the full recovery of capital and interest on existing debt provided to SAA by existing lenders, which is the subject of existing government guarantees;
• The process will provide an opportunity to review the airline's cost structure, while attempting to maintain as many jobs as possible;
• Business rescue will prevent "a disorderly collapse of the airline" and provides an opportunity to reorganise state aviation assets to be more sustainable and more attractive to an investment partner. [more - original PR]