Embattled state owned carrier South African Airways (SAA) has received a much needed cash injection in the form of emergency funding.
This funding amounts to R3.5 billion and is being granted by the Development Bank of Southern Africa.
“The Facility was approved by the Bank’s Board Credit and Investment Committee after a thorough and detailed consideration of the matter in full compliance with the Bank’s internal credit approval processes. The Facility is secured by way of a Government Guarantee issued by the Government of the Republic of South Africa, represented by the Minister of Public Enterprises with the concurrence of the Minister of Finance as required by the South African regulatory framework,” the bank said in a statement.
The Development Bank of Southern Africa has made an immediate draw-down of R2 billion available.
“Stakeholders of the airline should now have comfort that the rescue process is on a significantly sounder footing, and that passengers and travel agencies and airline partners may continue to book air travel on SAA with confidence,” SAA wrote in a statement.
The carrier says that funding for the restructuring phase after a plan is adopted is being discussed with potential funders.
“The restructuring of SAA will provide an opportunity to develop a sustainable, competitive and efficient airline with a strategic equity partner remaining the objective of government through this exercise and will result in the preservation of jobs wherever possible,” SAA said.
Whether this will be true in practice remains to be seen but at least for now SAA can continue flying passengers to their destinations without hiccups.