Events

SAA ASKED FOR R10BN INJECTION – GIGABA

CAPE TOWN- South Africa’s troubled state-run airline South African Airways asked the Treasury for a R10 billion bail-out in March, Finance Minister Malusi Gigaba said in a written reply to parliamentary questions.

Gigaba did not say if the request for R10 billion would be granted. The minister said the request had been made in a one-year corporate plan submitted by the airline.

The airline was provided state funds in July to help it repay loans of about R2.3 billion to Standard Chartered.

The national carrier has been bankrupt and surviving on state-guaranteed loans, and failing to submit its financial statements.

Earlier this month, the Democratic Alliance described the R2.3 billion bailout as a blow to the credibility of the SAA board and the National Treasury.

The Democratic Alliance’s Alf Lees said: “The situation with the SAA just goes from bad to worse. We knew this was coming and we asked National Treasury on Wednesday in Parliament whether this would be necessary. We were reassured that negotiations with the banks were going well and there would not be a problem. That seems to have not been the case.”

Treasury Director-General Dondo Mogajane recently said if SAA failed to meet its debt obligations, it would have a ripple effect on the government’s entire loan guarantee framework.

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