Government rejects SAA 10bn request

todayApril 15, 2020 10

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 Government has denied South African Airways(SAA)  a further R10 billion in funding for the business rescue process.

Public Enterprises Minister Pravin Gordhan has made it clear that government does not have the money to support SAA’s request.

In a letter to SAA, Gordhan said government would not support the extension of the foreign currency borrowing limit to permit foreign financing of the business rescue plan.

The national carrier was placed under business rescue in December 2019, in January government secured R2 billion for SAA however the amount was not enough and resulted in some operations being halted.

“Government is unable to provide additional funding to sustain the business rescue process beyond the funding that has already been provided to the airline in the form of post commencement finance (PCF),”

The public enterprise minister reiterated in his letter to the business practitioners that they should consider options within their available resources.

“Further to this, please note that neither will lending guarantees be provided in respect of the business rescue process”

“The advent of Covid-19 pandemic has further stretched resources in government’s effort to mitigate the impact on the health of our people and on economic activity,”

Cabinet is expected to meet on Wednesday to discuss economic relief measures to deal with the outbreak which has caused a strain on the economy.

Covid-19 has claimed the lives of 27 people and has infected 2,415 in South Africa.

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