SAA's debt at R13.8bn, losses to widen – executives

29th November 2017

By: Reuters

  

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Losses at South African Airways (SAA) are set to widen to R4-billion ($292.86 million) in 2017/18 from a previous estimate of R2.8-billion, the State airline's CFO said, piling further pressure on government finances.

Last week, SAA said even with a government injection of R10-billion, the struggling airline will remain under-capitalised with a negative equity position of over R9-billion.

CFO Phumeza Nhantsi told parliament's finance committee on Wednesday that the higher projected losses for 2017/18 were related to the retirement of five leased narrow-body aircraft, which meant flights had been cancelled and planes grounded.

Vuyani Jarana, SAA's CEO, said the airline had outstanding debt of R13.8-billion ($1.01-billion) as of this month and that it needed to pay back domestic lenders and US bank Citi R4-billion by March 2018.

"The biggest challenge at SAA is the capital structure as well as the commercial strategy. If we are able to fix that we will be able to get SAA back on its feet," Jarana said.

SAA has been relying on government guarantees to keep it solvent and has been cited by major rating agencies as a threat to South Africa's economy. It received the latest bailout in September.

Edited by Reuters

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