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20-Jun-2017 9:19 AM

South African Airways reports progress on five year business plan

South African Airways (SAA) stated (19-Jun-2017) it made "significant headway" in developing a "comprehensive and robust" five year business plan, designed to address existing and long term challenges and improve efficiency and financial stability in response to "liquidity and solvency challenges". Work on the plan commenced "in earnest" in Jan-2017 with Seabury Consulting to assist in finalising and validating specific initiatives, which will be announced once the plan is approved by South Africa's Government. The airline contacted lenders to renegotiate the management of its loans and has government guarantees totalling ZAR19.1 billion (USD1.5 billion). By 30-Jun-2017, ZAR9 billion (USD693.8 million) will be due and payable and only one lender expressed a desire for the loan to be repaid. Acting CEO Musa Zwane said "We remain optimistic that the company will meet its loan obligations as these become due through negotiations with lenders and other initiatives" and added: "The renegotiation of the terms of the loans are ongoing and SAA is optimistic that the airline will continue to operate, honour its obligations to its customers, suppliers and partners". The carrier stated: "SAA has a weak balance sheet, relies heavily on government guarantees to remain operational and has not been profitable in the last few years. The situation is not only undesirable but unsustainable and this led to the development of the turnaround plan that has been put in place". [more - original PR]

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