BL Premium reports that a draft business rescue plan for SAA circulated to affected parties at the weekend advises that it will take some R21bn to settle all the obligations of the old SA Airways (SAA) and capitalise a new state-owned airline.
The plan suggests that the new company will purchase the entire shareholding of the old SAA. The airline’s lenders, whose loans are guaranteed and who are the biggest creditors, will be repaid in full over the next three years with the R16.4bn that was set aside in the February budget’s medium-term expenditure plan. Another R600m, at minimum, will be required to pay concurrent creditors, whose claims are not secured. In addition to these amounts, the plan envisages that the government will put a minimum of R2bn into capitalising a new airline. The state will also bear the cost of retrenching many, but not all, of SAA’s 10,000 staff at a cost of about R2bn. This would bring government’s commitment to settling the commitments of the old SAA and recapitalising a new company to R21bn. The rescue plan is still in a draft form and has not been finalised or put to a vote of creditors. Since 2003, SAA has received R31.2bn in cash bailouts from the Treasury.
- Read the full original of the report in the above regard by Carol Paton at BusinessLive (paywall access only)
Read too, SAA rescue plan calls for taxpayers to cough up further R4.6 billion, at Fin24
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