SAA claim R1b payout from government was to settle an old debt

Posted by Olerato Ramafsi on 28 February 2023

SAA try to distance themselves from the government by claiming that the current payout from treasury is to settle an old debt.

Government will hold minority ownership of SAA

After the announcement in the budget speech by Finance Minister Enoch Godongwana that SAA is to receive R1 billion from Treasury.

The airline sent out a press release stressing that the allocation is part of the government’s original commitment to the business rescue process (which SAA exited in April 2021) and will be used to cover outstanding liabilities, specifically those relating to the final dividend payment to creditors and the refund of unflown tickets to affected passengers. These debts date back to when SAA was placed in business rescue in December 2019.

SAA’s Chief Financial Officer, Fikile Mhlontlo, said in the latest media release: ‘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 R3,5bn that was needed for SAA to settle all debt that the Business Rescue practitioners had earmarked. 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 R2,586bn. The airline will continue to negotiate with National Treasury for the balance of the funds and co-operate with all the conditions that may accompany the flow of these funds,’ said the airline in its release.

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