SAA creditors set to meet to review plan as govt fails to raise new funding
South African Airways (SAA) administrators have scheduled a creditors meeting on Friday after the government missed a deadline to make funding available for the airline's restructuring plan.
The administrators took control of state-owned SAA in December and formulated a rescue plan in June, which will require at least R10 billion in new funds to work.
Aviation economist Joachim Vermooten says 26.9 billion is a more accurate figure of how much is needed to rescue the airline.
Most of this money would go to paying creditors, he explains. Only a small portion (around R2.8 billion) would go towards the initial working capital of starting a new airline.
I don't think it will be possible for any newcomer or any new investor to start paying in part of the losses already made because these amounts represent losses that were already made for which bank borrowings were already taken, now the banks want their money bank.Dr Joachim Vermooten, Independent transport economist
The bulk of it is the repayment of existing debt. It's only a small R2 billion out of R26.9 billion that goes towards the restart of a new airline.Dr Joachim Vermooten, Independent transport economist
SAA can only survive or be resuscitated upon quite significant investments.Dr Joachim Vermooten, Independent transport economist
Listen to Dr Joachim Vermooten in conversation with Refilwe Moloto:
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