Late last year it was announced that South Africa Airways would be put into business rescue as a means to restore confidence in the airline and safeguard assets.
This morning the Department of Public Enterprise (DPE) issued an update in regards to SAA.
The highlight in the update is news that the department met with Business Rescue Practitioners at the weekend. The meeting sought to raise funds for the embattled airline. The DPE will engage with the National Treasury in regards to raising funds.
The department also reiterated that old habits – as regards SAA at least – should die.
“We are determined to break with the past patterns of bailouts as these have become a moral hazard. The Business Rescue process is unprecedented at this level and fashion and in the public sector,” the DPE wrote.
SAA was given R2 billion by lenders as post commencement finance to enable the continued operation of the airline. Government, through the Treasury, committed an equal amount.
Where this R2 billion will come from is not clear at this stage and it’s up to Government and Treasury to determine that.
“We are determined to contribute to the Business Rescue process so that we could minimise job losses and give birth to a rejuvenated SAA that all South Africans could be proud of,” the department added.
“The creation of a sustainable, competitive and efficient airline with a strategic equity partner remains the objective of government through this exercise,” the DPE concluded.
Statement on SAA pic.twitter.com/FWQ4M29g08
— DPE_ZA (@DPE_ZA) January 19, 2020