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The Department of Public Enterprises (DPE) has confirmed that the government will change funding priorities to finalize the restructuring of South African Airways (SAA) and the implementation of the airline’s business rescue plan.
An announcement to that effect will be made in the Adjustment Appropriation Bill, which will soon be submitted to Parliament, the department said in a statement on Friday afternoon (September 18).
“The national airline will not be liquidated,” he said. “As the restructuring process should be nearing completion in the next few weeks, lenders will be asked to finance the restructuring process and meet the commitments of voluntary severance packages and downsizing. “
At the same time, the DPE said it will continue to assess the 20 unsolicited expressions of interest from private sector funders, private equity investors and partners for a future restructured SAA.
“The DPE is sympathetic to the plight of SAA employees as it continues to work with other government departments, including the National Treasury, to ensure that the airline’s restructuring plan is successfully implemented.
“In charting the way forward, DPE believes that the key to resolving the difficulties SAA faces is the completion and implementation of the business rescue process, followed by the start of a restructured airline, the appointment of new non-executive directors and a leadership and securing a credible strategic capital partner who can bring the necessary technical, financial and operational expertise into the business. “
Bloomberg has reported that Ethiopian Airlines Group is among the companies in discussions with the South African government on the possibility of offering support to SAA.
Africa’s largest airline is considering ways to help South African Airways fly again after more than five months of inactivity, said the people, who asked not to be identified because the conversations are private.
Participating in the airline is one of the options under discussion, they said, although negotiations are ongoing and an agreement may not be reached.
South Africa needs to raise more than R10 billion to revive SAA, according to a rescue plan compiled by administrators and backed by both the state and labor groups.
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