Tuesday, 19 February 2019

Rolling over debt may keep South African Airways in the air!

Photo South African Airways
There could be light at the end of a long dark tunnel of financial difficulty for the national government-owned South African Airways after news emerged the firm was in talks with a number of lenders to effectively roll-over its mountain of debt!

The embattled airlines' Chief Financial Officer Deon Fredericks confirmed this week that the negotiations were ongoing with lenders regarding rolling over at least $650 million of debts, that are due in March.  The rollover would give the troubled airline some much-needed breathing space and keep the company flying.

The exact details of the rollover being arranged has not been released at this stage, although it is being reported that the debts will be rolled for approximately five years. However, the facility is conditional on the South African Government guarantying the loans as well as providing the carrier with yet more funds.

“We’re busy with banks now, discussing. But it will (be) dependent on the budget if it’s a long-term or short-term (rollover),” Fredericks told news agency Reuters at a briefing held on Monday. “If there’s sufficient (guarantees) in the budget to give them comfort, then they will be happy to restructure for a long term.”

Also advised at the meeting was news that SAA had secured some 3.5 billion rand of loans and would require a further 4 billion rand from June which will keep the carrier in the air until the end of 2021.