National Treasury has agreed to give SAA a special appropriation of R10bn by the end of September, Director General, Dondo Mogajane, told Member of Parliament.
“It will be for R10bn, we have decided, because that will cover everything,” he said during a briefing on the ailing airline’s latest quarterly results to Parliament’s standing committee on finance.
The bill is due to be tabled in a special sitting and Mogajane said he hoped that the legislature would agree to the measure, adding that Treasury would be forced to look at a “Plan B” if MPs refused to support it.
He said nine lenders had agreed to roll over debt that would become due at the end of the month, while Citibank has agreed to roll over a portion of the R1,761bn the loss-making airline is due to repay by September 30.
TourismUpdate.co.za reports SAA relies on government guarantees of R20bn and needed government help in July to cover its debt. Treasury paid R2,2bn to Standard Chartered earlier this year, with money taken from the government’s emergency fund.
The Treasury announcement follows much speculation about the form of further financial aid to the airline, following a leak of a proposal to sell Telkom’s shares to recapitalise SAA.
Mogajane said the bill would not be linked to the proposed sale, which would raise an estimated R14bn.
The briefing saw SAA confirm that none of the five assumptions on which it has based its turnaround strategy had materialised.
These were SAA being a going concern, debtors extending terms for a minimum of three years, government giving a capital injection of at least R13 billion over three years, as well as the retiring of five excess wide-body aircraft and the retention of all the narrow-body aircraft in its fleet.
One of its narrow-body aircraft has been retired and five more would follow by the end of the month.
This will lead to a reduction of 37% of its share of the local market and four percent of the international market.