Commodities

S.Africa commits $650 mln to ailing airline SAA, administrator says

Credit: REUTERS/SIPHIWE SIBEKO

The South African government has told administrators of South African Airways (SAA) that there is a "clear cabinet commitment" to provide the state airline with 10.5 billion rand ($650 million) of funds, one of the administrators said on Friday.

Add details

JOHANNESBURG, Sept 18 (Reuters) - The South African government has told administrators of South African Airways (SAA) that there is a "clear cabinet commitment" to provide the state airline with 10.5 billion rand ($650 million) of funds, one of the administrators said on Friday.

The administrator told an SAA creditor meeting that the government's communication had the support of National Treasury but the timelines and mechanisms for the funding were yet to be finalised.

The administrators took control of SAA in December after almost a decade of financial losses and published a rescue plan for the airline in June following repeated delays and wrangling over its future.

But the plan, which envisages scaling back SAA's fleet and cutting jobs, needs at least 10 billion rand to work, and the cash has not materialised since July, when creditors approved the restructuring plan.

The Department of Public Enterprises, the ministry responsible for SAA, said on Thursday that it was still trying to source the necessary funding and that it was assessing proposals from several potential strategic equity partners.

($1 = 16.1359 rand)

(Reporting by Alexander Winning; Editing by Olivia Kumwenda-Mtambo)

((alexander.winning@tr.com; +27 10 346 1076))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

World Markets

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More