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Future of SAA: 'A clear showdown between govt and business rescue practitioners'

18 January 2020 9:49 AM
Tags:
SAA
Guy Leitch
Business rescue
finance minister tito mboweni
Les Matuson
Guy Leitch says government, as SAA owner, seems unwilling to meet the terms of banks to grant airline funding to continue flying.

Is South African Airlines (SAA) in its final death throes?

It's been reported that the embattled national airline could be forced to suspend flights on Sunday if it doesn't receive the outstanding R2 billion pledged by Treasury to fund the business rescue process initiated in December.

RELATED: SAA's future on the line if govt doesn't come up with R2bn funding it promised

On Thursday, Finance Minister Tito Mboweni said the government was still trying to find the additional funding.

Aviation expert Guy Leitch, who's the managing editor of SA Flyer Magazine, says after the government gave the airline R2 billion out of a promised R4 billion, it seems unwilling to guarantee loans because of tighter terms prescribed by banks.

One can take a reasonably informed guess as to what has happened here - quite simply as the situation at SAA has become more and more vulnerable, more and more tenuous, so the banks and in particular Nedbank has increased its requirements as to what it would satisfy itself in terms of a loan.

Guy Leitch, Managing editor - SA Flyer Magazine

At the same time we're seeing increasing reluctance from Minister Tito Mboweni to just keep putting money into these endless plains of state-owned enterprises and SAA is the case in point at this stage.

Guy Leitch, Managing editor - SA Flyer Magazine

There seems to be at this stage a clear showdown between the government, as owners of the airline, who are expected to just keep paying and writing more and more cheques for the airline and the business rescue practitioners Les Matuson and co.

Guy Leitch, Managing editor - SA Flyer Magazine

Leitch had this to say on the resignation on Friday of SAA director Martin Kingston, whom he describes as having been "the stabilising interest behind the board".

I think he's very concerned that he, as a director, would be held personally responsible if the airline continues to trade on Monday without having received the necessary funding from government to do so.

Guy Leitch, Managing editor - SA Flyer Magazine

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18 January 2020 9:49 AM
Tags:
SAA
Guy Leitch
Business rescue
finance minister tito mboweni
Les Matuson

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