SAA administrators seek creditor fund accord
The administrators of South African Airways, the state-owned airline that’s in bankruptcy protection, want the government to ring-fence R16.4-billion that it has guaranteed can be used to pay creditors if the airline fails, a person familiar with the situation said.
The administrators want an agreement for the money to be paid into an escrow account -- the last outstanding issue that needs to be resolved before the carrier’s business rescue process can be finalized -- to be signed on Monday, said the person, who spoke on condition of anonymity because the discussions aren’t public. A creditors’ meeting is likely to be held on July 30 to decide on a way forward if the government’s doesn’t fulfill the condition.
SAA, which was established in 1934, hasn’t made a profit since 2011 and has been surviving on government bailouts. Finance Minister Tito Mboweni has said it should be closed while Pravin Gordhan, the public enterprises minister, maintains that the country needs a national airline.
Mboweni has agreed to help raise funds for a reconfigured state airline, but stopped short of saying the government will provide them.
The pledge to “mobilize” a further R10.3-billion to keep the airline flying has met another of the administrators’ requirements, the person said on Monday.
Business Times, a Johannesburg-based newspaper, previously reported on the administrator’s condition. The National Treasury didn’t immediately respond to a request for comment.
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