SAA nears debt rollover agreement with lenders

South African Airways is moving closer to an agreement with lenders to extend R9.2 billion ($642 million) of debt, a deal that would buy the unprofitable state airline more time to restore its battered finances.

An agreement has been reached “in principle” to roll over the borrowings, “but of course there are certain conditions that need to come through,” Chief Executive Officer Vuyani Jarana said at the CAPA aviation conference in Dubai on Tuesday.

“It’s an ongoing conversation.”

An agreement with lenders would ease SAA’s dependence on the National Treasury, which allocated R5bn to the carrier last year to help it meet debt payments. Finance Minister Tito Mboweni has made clear the government is reluctant to approve a further outlay, saying in November he favors shutting down the company.

Eskom, another state entity, was in February granted a record R69bn bailout to be paid over three years.

Jarana was hired in late 2017 to lead a turnaround of SAA after years of mismanagement and corruption scandals. One of his plans is to transfer four unwanted Boeing SA aircraft from the main airline to low-cost carrier Mango, which has the scope to increase capacity, he said.

“There’s more growth in the low-cost services in the domestic market, which makes Mango very critical for SAA,” he said.

SAA is also looking to hire an adviser to help sell the state-owned airline’s catering business, Jarana said, a move that would raise capital and rid the carrier of less important assets.

ZAR/USD
17.00
(-0.09)
ZAR/GBP
21.24
(-0.12)
ZAR/EUR
19.14
(-0.13)
ZAR/AUD
11.81
(-0.13)
ZAR/JPY
0.16
(-0.20)
Gold
1774.74
(+0.03)
Silver
18.05
(+0.01)
Platinum
808.00
(+0.25)
Brent Crude
42.78
(-0.79)
Palladium
1914.01
(+0.62)
All Share
54521.90
(-0.17)
Top 40
50179.89
(-0.26)
Financial 15
10150.02
(-0.64)
Industrial 25
76554.73
(+0.52)
Resource 10
50138.02
(-1.24)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1577 votes
I am taking a hit, but should be able to recover in the next year
23% - 2072 votes
My finances have been devastated
34% - 3092 votes
It's still too early to know what the full effect will be
25% - 2241 votes
Vote