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SAA creditors set to meet to review plan as govt fails to raise new funding

18 September 2020 10:17 AM
Tags:
SAA
SAA business rescue
SAA creditors
SAA funding

The creditor meeting will be convened to discuss the funding issue and the proposed future of the cash strapped state-owned entity.

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:


18 September 2020 10:17 AM
Tags:
SAA
SAA business rescue
SAA creditors
SAA funding

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