South Africa’s state-owned airline SAA has been given additional time to settle a maturing debt, although the relief may be extended a further two years, Finance Minister Malusi Gigaba said in a report to parliament on Friday.
The debt repayment of R5 billion ($374 million) owed to domestic lenders has been pushed to the end of October from the end of September, Gigaba said.
The Treasury last month gave South African Airways (SAA) emergency state funds to help repay a R1.8 billion loan to Citibank, as well as R1.2 billion for working capital, amid concerns the airline would default on its payments.
“The agreement with the domestic lenders also provides for the option of an additional extension beyond October 31 to March 31 2019,” Gigaba said.
He said that SAA, which has one of Africa’s largest airline fleets has total guarantees of R19.1 billion, of which R16.3 billion have been used.
Gigaba is expected to deliver his maiden budget speech in parliament on October 25. Plans to bolster good governance and financial support at weak state-owned companies are likely to be part of his agenda.
The minister is currently attending the International Monetary Fund meetings in Washington, where he is also due to meet rating agencies and investors in a bid to convince them that the economy is recovering.
The IMF forecasts South Africa’s economy will grow by 0.7% this year versus 0.3% in 2016. ($1 = R13.38)