South African Airways is looking for R16 billion from financiers, which it needs to meet its funding and working requirements, and to help with its mounting debt.
The announcement from the group comes just days after it publicly stated that it could fund its debt, Reuters reported.
On Friday, the Democratic Alliance called for a parliamentary meeting to work out how to prevent the airline from missing payments to creditors, but SAA has said it was able to pay its debts.
However, the tune has now changed as the group has put out a notice looking to raise R16 billion from banks and other financial institutions, through secured and unsecured funding with a 3 to 15 year duration.
SAA also wants to start drawing down the amount within two weeks of signing the loan agreement, it said.
The airline is sitting on a ticking time-bomb, with pressure on the group to release its financial reports showing solvency, or else face having its planes grounded.
However, the group is in dire need of a guarantee from National Treasury for over R5 billion, which is being held back by finance minister Pravin Gordhan, until the group elects a new board.
SAA has received a number of government bailouts worth at least R14.4 billion as part of its turnaround strategy, but Gordhan warned in January the carrier cannot become a liability on the fiscus.
The SAA board, chaired by friend of president Jacob Zuma, Dudu Myeni, has been behind that national carrier’s decline over the past few years, with a number of scandals and questionable business decisions hanging over it. The board, Myeni in particular, has been accused of severe mismanagement of the carrier.
Myeni, and her refusal to stand down from the position, is speculated to be behind damaging moves by president Zuma, including the removal of former finance minister Nhlanhla Nene – who also blocked money from being sent to SAA – in 2015, and is seen as part of the recent move to push criminal charges against Gordhan.
SAA is an urgent issue for all parties involved.
Its accounts for 2015 are due in parliament by 15 September, but there is further pressure coming from Hong Kong, which requires accounts (showing solvency) by 6 September or else SAA planes will be grounded.
The South African Air Services Licensing Council also requires accounts and proof of solvency by early October or else it will ground SAA planes. Leasing companies could also seize assets if this were to happen.