S.African govt says SAA restructuring funding deal

The South African government said Friday that was it was concluding efforts to secure funding to restructure the ailing national airline, vowing it would not be liquidated.

In a statement, the Department of Public Enterprises said “government will re-prioritise funds to finalise the restructuring of South African Airways (SAA) and the implementation of the airline’s business rescue plan”.

“The national carrier will not be liquidated,” the department said in a statement shortly after a meeting of the airline’s creditors and business rescue practitioners.

In July creditors of cash-strapped SAA approved a mass restructuring plan that would replace it with a new, restructured and competitive carrier.

Earlier on Friday, the airline’s business rescue practitioners told creditors that government had stated a “very clear cabinet commitment” to make available 10.5 billion rand ($646 billion) to restructure the airline.

Government also said it was assessing 20 “unsolicited expressions of interests from private sector funders, private equity investors and partners for a future restructured SAA”.

Heavily indebted, SAA was placed under a state-approved rescue plan in December.

The airline, Africa’s second largest after Ethiopian Airlines, has not posted a profit since 2011 and has survived for years only on state bailouts.

A symbol of the mismanagement of state-owned enterprises that characterised ex-president Jacob Zuma’s reign, the airline was forced to abandon many routes even before the Covid-19 pandemic.