After two weeks of uncertainty, South African Airways (SAA) has been able to secure R3.5 billion in funding from the Development Bank of Southern Africa.
This was confirmed by its business rescue practitioners on Tuesday.
The rescue practitioners can immediately draw down R2 billion of the facility, the remaining amount required for the process that government had been struggling to raise.
“Funding for the restructuring phase after the business plan is adopted is being considered by potential funders,” said the practitioners in a statement.
The state-owned airline was placed under voluntary business rescue in December, a process that required R4 billion in post-commencement funding. An amount of R2 billion was raised in state-guaranteed loans from lenders but government had been slow in finding the remaining R2 billion cash injection, which was supposed to be raised in a “fiscally neutral manner”.
A week ago, SAA cancelled 38 “low demand” domestic and international flights in order to save money despite assurances from the business rescue practitioners, two days prior, that flights would remain operational.
News of the cancellation first appeared on Flight Centre’s Twitter page prior to SAA making a formal announcement.
The business rescue practitioners have again made assurances that “passengers and travel agencies and airline partners can book air travel on SAA with confidence”.