SAA is in some serious debt.
It seems as if South Africa is famously known for our love of…Debt.
The government said on Saturday that South African Airways is facing around R9 billion of debt which matured at the end of June which involves six or seven lenders, according to the Treasury.
SAA has been provided with state funds to help it repay loans of about R2.3 billion to Standard Chartered.
On Thursday the Treasury told legislators it was in discussions with lenders to roll over the R9bn owed to them.
In a statement issued on behalf of the Treasury, the government said that the funds provided to SAA had been sourced from the National Revenue Fund (NRF), which under law allows any minister to authorise the use of funds for expenditure of an exceptional nature.
SAA already relies on government guarantees of about R20bn to keep it financially sound.
Finance Minister Malusi Gigaba’s office said Standard Charted had requested immediate payment of the money owed, but that the remaining lenders had indicated they were open to deferring the debt.
On Friday the Finance Minister Gigaba, speaking at the opening of the ANC’s policy conference, unnerved markets when he said the country may need outside financial assistance.
If our country wasn’t already in enough debt because of our president, SAA just had to make it worse.
So, the question is: Are South African tax payers going to be paying for SAA’s R9 billion slip up?