Staff Reporter – The Zimbabwe Daily
Ekhurhuleni, South Africa – South Africa’s embattled state owned airline, South African Airways (SAA) is expected to get a cash injection of US$600 million in the coming months.
SAA is in a huge financial stress which has since prompted the intervention of a Business Rescue Plan (BRP) which was initiated a few months ago to keep it afloat.
To date, the BRP will result in the restructuring of SAA which will see 2 700 employees losing their jobs.
It is projected that US$600 million will be required to fund the BRP, clean up and stabilise the balance sheet of SAA, restructure the rest of the group’s entities that are not in business rescue, provide working capital for the rest of the group’s entities, and to create a stable and viable platform for a new restructured national airline.
Although details are still sketchy on where the US$600 million will come from, the Department of Public Enterprise said it welcomed the recommendations of the BRP.
“The Department of Public Enterprise welcomes the attraction of amix of local and international investor groups to provide the new airline with technical, financial, and operational expertise to ensure significant South African ownership whilst diversifying the investor base.
In terms of the business rescue plan that was published by the Business Rescue Practitioners for SAA, government, as the sole shareholder of SAA, is required to provide a letter of support for funding the plan where it results in a viable and sustainable national flag carrier that provides international, regional and domestic services,” read part of the statement issued out by the Department of Public Enterprise.