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South African Airways (SAA) welcomes R 1 billion towards historical debt

South African Airways (SAA) welcomes R 1 billion towards historical debt

South African Airways (SAA) welcomes the announcement by Finance Minister, Enoch Godongwana, of a R 1 billion allocation to settle a portion of the outstanding obligations on the implementation of SAA’s 2020 Business Rescue Plan.
As noted by Minister Godongwana, the allocation is part of the government’s commitment to the business rescue process that SAA exited in April 2021. It will be used to cover outstanding liabilities, specifically those relating to the final dividend payment to creditors and the refund of legacy un-flown tickets to affected passengers - which date back to the period when SAA was placed in business rescue in December 2019.

SAA’s Executive Chairman and Chief Executive Officer, Professor John Lamola says, “SAA’s operations have progressed positively since the airline emerged from business rescue, and as reported to Parliament earlier this month, SAA is no longer technically insolvent, a milestone which we reached a year earlier than projected”

The Chief Financial Officer, Fikile Mhlontlo, adds, “SAA has reached a point where we cover our operating costs. It must be emphasised that the allocation announced relates only to historical debt. These funds are not meant to bolster the business plan we are currently executing.”

The R1bn allocation is part of original R 3.5 bn that was needed for SAA to settle all debt that the Business Rescue practitioners had ring-fenced into a Receivership. Due to the financial performance of SAA and the innovations of its management team, the total balance expected from National Treasury has been reduced to R2.586 bn. The airline will continue to negotiate with National Treasury for the balance of the funds and cooperate with all the conditions that may accompany the flow of these funds.