MIAMI – South African Airways (SA) is set to receive US$650m as part of a government restructuring funding. According to a SA Administrator, Siviwe Dongwana, the South African authorities committed to supporting the airline in conjunction with the National Treasury. Financing mechanisms and timelines are still in talks.
In December 2019, administrators took control of the state-owned carrier due to ongoing financial losses. In July 2020, creditors approved the proposed business rescue plan, preventing the airline’s liquidation. Approximately 85% of the creditors voted in favor of the scheme. At the time, the plan would see the airline move into the ownership of creditors and employees.
Dongwana added that the administrators-creditors meeting would take place next week to inform parties about government injection outcomes. From there, the administrators would assess the SA’s financial possibilities.
“If the funds flow early enough, then they eliminate the need to deal with the issue of a wind-down or a liquidation,” stated Dongwana.
On its part, the South African Department of Public Enterprises (DPE) said that the injection announcement would go to parliament soon. The DPE also said that the national airline will “not be liquidated.” Thus, the responsible parties of the restructuring would approach lenders to finance the process and the layoffs.
Regarding the latter, this Friday two of SA’s unions picketed outside the airline’s office. The workers demand the government make available rescue funds, as reported by Reuters. In a few days, they may have a favorable answer to their request.
Featured photo: South African Airways Airbus A340-300. Photo: Joe Ravi.