South African Airways Secures $562m Loan

January 22, 2015 Felicia Omari Ochelle Business, Finance/Money, Logistics & Transportation

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VENTURES AFRICA – The South African government has approved a supplementary loan guarantee of 6.488 billion rand ($562 million) to sustain its national carrier, South African Airways (SSA), the Treasury said on Thursday.
The airline has been through a series of rough patches, culminating into an overall loss of about $1.4 billion as of March 2013. It has more than once sought external help to keep the airline flying. This latest guarantee takes the total guarantees given to SSA to 14.4 billion rand ($1.3 billion) – all in a bid for the carrier to stay afloat.
The terms for the guarantees are simple; the airline has to make available details of a comprehensive 90-day rescue plan within a month, the Treasury said in a statement. It was also added that SAA should revisit operating expenses and strengthen internal controls, governance and working capital management.
In August 2014, Public Enterprises Minister, Lynne Brown, at a
briefing in Johannesburg, said; “We are looking at guarantees for funding for SAA.” This was a follow up to the airline’s plea for a $4.6 billion Private Rescue Fund. By October, the government said it would contemplate on a strategic partner for SAA.
Last year, the carrier said it was finalising plans to replace up to 30 planes in a long-haul fleet upgrade.