September 26, 2020

South African Airways needs state cash next week -administrators

Adds detail, background

JOHANNESBURG, Sept 10 (Reuters)South African Airways needs short-term funding from the government by the end of next week for the state carrier’s business rescue process to continue, its administrators said on Thursday.

“It is prudent to advise affected persons of the company’s dire financial position,” they said in a statement.

“The existing funds which are available for operational expenditure …are near depletion.”

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

They plan to scale back the fleet and cut jobs but at least 10 billion rand ($598 million) in new funds is needed.

The government has yet to clarify where it will find the money.

The administrators – or business rescue practitioners (BRP) – said the government had so far advanced 9.3 billion rand to pay various lenders, but that the remaining short-term portion of needed funding had yet to materialise.

They said if they are not satisfied that sufficient progress has been made on advancing the funding, a meeting of creditors will be convened on September 18 “to engage with affected persons on this issue”.

($1 = 16.7332 rand)

(Reporting by Mfuneko Toyana; editing by Jason Neely)

((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))

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