Authorities commits to fund ‘new’ SAA – with no less than R10 billion wanted

The Nationwide Treasury has dedicated to help and supply funding for South African Airways’ new enterprise rescue plan.

This funding will consequence within the emergence of a brand new viable, sustainable, aggressive airline, the Division of Public Enterprises stated in a press release on Thursday (16 July).

By way of the enterprise rescue plan, authorities as the only real shareholder of SAA is required to supply a letter of help for funding the plan.

It’s projected that R10.1 billion will probably be required to fund the plan. This cash will probably be used to:

• Clear up and set up the stability sheet;
• Restructure the remainder of the group entities that aren’t in enterprise rescue;
• Present working capital for the remainder of the group’s entities;
• Create a secure and viable platform for a brand new restructured nationwide airline.

The restructuring may also embody severance packages to about 2,700 SAA staff who will probably be retrenched, the Division of Public Enterprises stated.

DPE WELCOMES COMMITMENT TO SOURCE FUNDING AND SUPPORT NEW SAA pic.twitter.com/HdMfVXlSIW

— DPE_ZA (@DPE_ZA) July 16, 2020

“The DPE is cognisant that airways internationally are in turmoil as a result of Covid-19 pandemic. There are potentialities for airline partnerships to enhance the size and scope of the aviation business and guarantee continuity of worth creation to the South African economic system,” it stated.

“Whereas sustaining a sure degree of presence within the possession of the brand new provider, the DPE welcomes the attraction of a mixture of native and worldwide investor teams to supply the airline with technical, monetary and operational experience to make sure vital South African possession while diversifying the investor base.”

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