Business

‘Mobilising’ SAA funding doesn’t mean money is there yet – nor that the playing field is even

Last updated on September 11th, 2021 at 02:38 pm

Minister of Public Enterprises Pravin Gordhan and Finance Minister Tito Mboweni on Thursday wrote a letter to South African Airways’ business rescue practitioners, committing to “mobilise” funding for restructuring SAA – but it remains unclear where the money will actually come from.

The letter, which does not mention particular amounts or sources of funding, was requested by SAA’s business rescue practitioners in order to determine whether a rescue plan, accepted by creditors on Tuesday, can actually be implemented.

According to the Department of Public Enterprises (DPE), which represents the government as SAA’s shareholder, the rescue plan projects that an amount of R13.1 billion will be required to fund the restructuring of SAA over the short to medium term.

Funding in stages?

“Different tranches of money will be required as different aspects of the restructuring takes effect,” the DPE said in a statement, confirming that a letter of commitment was sent to the rescue practitioners.

This raises the question whether the DPE intends to “mobilise” funding in stages.

The DPE makes it clear that the funding commitment gives effect to Cabinet’s support of a new airline “and the concerted effort to mobilise funding from various sources, including from potential equity partners for the uptake of the new airline”.

At the same time, the DPE acknowledges that the global airline industry has been devastated by the impact of the Covid-19 pandemic.

“There are possibilities for airline partnerships to improve the scale and scope of the aviation industry and ensure continuity of value creation to the South African economy,” states the DPE.

Yet, it is unclear whether “airline partnerships” would mean actual equity investment in SAA, or, as in past attempts with other airlines, to merely work together in order to create greater scale and cost savings.

(Fin24)

Albert Echetah

Recent Posts

South African Group Petitions For Chidimma Adetshina’s Removal FromInternational Miss Universe Pageant Over Identity Fraud Allegations

A group called Progressive Forces in South Africa has launched a petition against MissUniverse Nigeria Chidimma Adetshina, with the aim…

November 5, 2024

Mauritius Reopens Social MediaAccess in Response to PublicPressure

Mauritius on Saturday overruled its decision to prohibit social media until the election onNovember 10th which was caused by a…

November 5, 2024

UAE Crown Prince Arrives in Ethiopia for WorldWithout Hunger Conference

The UAE’s Crown Prince of Abu Dhabi, His Highness Sheikh Khaled bin Mohamed bin Zayed AlNahyan was in Addis Ababa…

November 5, 2024

Zimbabwe’s rich (Mbingas) linked to state looting

Gilbert Machokoto, a former teacher, said that setting up a business in the late 1980s, shortlyafter Zimbabwe's independence, was ‘like…

November 4, 2024

Historic Shift in Botswana as PresidentConcedes to Opposition Victory

Following elections in which the party that had ruled the diamond-rich nation for almost 60years suffered a historic setback. Botswana's…

November 4, 2024

Lightning Strike at Uganda Refugee CampClaims 14 Lives, Including Children

A lightning strike at a refugee camp in Uganda kills 14 people including children with 34 othershospitalized. The incident happened…

November 4, 2024

This website uses cookies.