The business rescue practitioners of South African Airways (SAA) have been successful in obtaining the balance of the post-commencement funding (PCF) required to meet the short term liquidity requirements of the airline.<\/p>\n
The advancement of the funds comes on the back of the business rescue process which began on 5 December 2019, with the local commercial banks providing the initial PCF of R2 billion in addition to the existing exposures to SAA, the practitioners said in a statement on Tuesday (28 January).<\/p>\n
“Discussions held with financial institutions have been fruitful with the Development Bank of Southern Africa offering to provide the next tranche of PCF, for a total amount of R3.5 billion, with an immediate draw-down of R2 billion,” the practitioners said.<\/p>\n
“Furthermore, funding for the restructuring phase after the plan is adopted is being considered by potential funders.”<\/p>\n
The business rescue practitioners added that the restructuring of SAA will provide an opportunity to develop a sustainable, competitive and efficient airline with a strategic equity partner remaining the objective of government.<\/p>\n
They added that this exercise and will result in the preservation of jobs wherever possible.<\/p>\n
“SAA is a key strategic asset which needs to be positioned to provide reliable connectivity to markets within South Africa, the African continent as well as servicing selected international routes.<\/p>\n
“Stakeholders of the airline should now have comfort that the rescue process is on a significantly sounder footing, and that passengers and travel agencies and airline partners may continue to book air travel on SAA with confidence.”<\/p>\n