The South African Government has promised another 5 billion rand that is around $400 million, capital injection to help rescue the struggling national flag carrier South African Airlines meet its obligations.
The CEO of South African Airways, Vuyani Jarana, told news agency Reuters that “Government has committed to inject another 5 billion rand into SAA. Part of that 5 billion rand we will repay some of the creditors, suppliers, then the balance will support us for working capital until around October/November,”
The troubled carrier will be seeking to negotiate some breathing space while the South African Treasury work through the regulatory normal budgetary process, it is required to follow, which also entails seeking cabinet approval. “If Treasury needs a certain period of time to do this, lets say up to September, between now and then, we are negotiating with lenders to give us a bridging facility on the back of that commitment,” Mr Jarana said.
SAA has long been seen by many as a huge drain of the country's finances and has a long history of losses, however, it is hoped by the government that the new executive leadership led by Mr Jarana, will soon return the carrier to a more profitable situation. The government is also looking for an equity partner to invest in the airline and to help with the implementation of the turnaround plan.
