SAA needs an additional R4bn - Treasury

2019-02-20 14:22 - Lameez Omarjee
Vuyani Jarana, SAA CEO. ~ Supplied

SAA will need an additional R4bn for the 2019/20 year, the funding will come from a combination of government guaranteed debt and recapitalisation, Treasury said.

According to the National Budget tabled in Parliament by Finance Minister Tito Mboweni on Wednesday, the national carrier is still not generating enough cash to repay its maturing debt or cover working capital requirements.

SAA most recently secured a R3.5bn loan to keep operating until March 2019. The airline needs a total of R21.7bn over the next three years for the implementation of its turnaround plan. It also recently confirmed to Fin24 that it is working on changing its operational model, Fin24 reported.

About R12.7bn of its guaranteed debt matures on March 31, 2019. SAA is negotiating with lenders to refinance its debt, according to Treasury.

Rather put money in railways

In a briefing ahead of the delivery of the speech, Mboweni told journalists if he had a choice between SAA and the Passenger rail Agency of South Africa (Prasa) he would ensure that funding would go to the railway system to transport people safely from their homes to work.

Mboweni pointed out that there are more people in SA relying on public transport like railway system and taxis than those using SAA.