South African Airways (SAA) – which submitted its request for going concern in December – is and will remain open for business, Finance Minister Pravin Gordhan said on Wednesday.
“The goal in the longer term is to ensure that the airline is able to operate without support from the state, as should be the case with all state-owned entities,” said Minister Gordhan.
In an update of matters at the national carrier, National Treasury said it has been working closely with SAA to ensure that it has the money it needs to meet its obligations. Among the steps taken include repatriating funds from oversees as well as efforts to secure further short-term bridging facilities.
“Of the R14.4 billion in guarantees extended to SAA, the airline has R2 billion it has not utilised, which can be tapped for additional financing.”
In addition, National Treasury has been in contact with several lenders that are providing SAA with unguaranteed short term facilities and indications are that the banks are not intending to withdraw their facilities at this time.
Regular engagements with lenders have been taking place since 2014 and will continue until the airline is stabilised.
“SAA submitted its request for a going concern guarantee during December 2015. National Treasury is currently considering this request. The approval of the guarantee is essential for finalising SAA’s financial statements on a going concern basis.”
Once this has been finalised, SAA’s Annual General Meeting will be held and the Annual Financial Statements will be tabled in Parliament.
National Treasury added that its efforts are focused on ensuring that in the short term, the airline is stabilised and that it has cash to meet its requirements and that governance and leadership issues are addressed – such as appointing a full board and speeding up the process of appointing a permanent Chief Executive Officer as these are essential for stabilising the airline.