South Africa to provide another USD342m to SAA by 31-Mar-2018
South Africa's Minister of Finance Malusi Gigaba, in the 2017 Medium Term Budget Policy Statement, announced (25-Oct-2017) another ZAR4.8 billion (USD341.78 million) will be transferred to South African Airways (SAA) by 31-Mar-2018. The Government already provided ZAR5.2 billion (USD370.26 million) in recapitalisation to the carrier so far in FY2017/18. The funds will be used for working capital and to settle debt, enabling the airline to reduce interest expenses. 60% will be used to partially pay local lenders and the remainder will be used as working capital. Conditions imposed on the airline by lenders and the Government include greater oversight and accountability, revalidation and implementation of the turnaround plan within specific time frames, appointment of critical personnel (including permanent CEO, CFO and chief restructuring officer) and compliance on all governance issues. SAA stated: "The injection will go a long way to stabilise the airline financially and will help restore the confidence of all stakeholders in the operational sustainability of the company" and added: "The implementation of SAA's turnaround plan must switch to a higher gear and reassure through results, all stakeholders that the airline is on course towards financial sustainability". The airline previously approached the Government with a request for recapitalisation of ZAR13.1 billion (USD932.69 million) over three years. The Government's exposure to SAA debt remains "significant" at ZAR15 billion (USD1.07 billion). Mr Gigaba stated: "There is risk that if SAA's financial fortunes do not improve, there will be further calls on the remaining guarantee". [more - original PR] [more - original PR - II]