Government has reportedly drafted a plan to fund the restructuring of South African Airways (SAA), if a business rescue plan for the struggling state-owned airline is adopted.
Last December SAA entered business rescue and administrators took over the running of the airline, while working on a plan to save the business.
In a draft plan the government has reportedly agreed to make a working capital injection, which the administrators estimated at not less than R2 billion, fund employee lay-offs, and make an allocation of at least R600 million towards the repayment of general concurrent creditors.
No more funds for SAA business rescue:
In April the Government told SAA’s business rescue practitioners that it would not give a further R10 billion funding for the bankrupt airline, this is as the government fights the COVID-19 pandemic.
Public Enterprises Minister Pravin Gordhan said the government will not provide any extra funding for the business rescue.
Gordhan also says lending guarantees will also not be provided in respect of the business rescue process, as the pandemic has stretched the country’s resources.
SAA was placed under business rescue in December last year. The practitioners are yet to publish their rescue plan.
Confusion over SAA’s plans to fly under level 3 lockdown: