Debt-laden SAA gets funds to avoid default

Bloomberg

South Africa’s National Treasury has transferred funds to South African Airways (SAA) to help the state-owned airline avoid default on its debt to Standard Chartered Plc., according to a statement from the department on Saturday.
“Government has decided to transfer funds from the National Revenue Fund to South African Airways to allow the airline to pay back its debt to Standard Chartered Bank thereby avoiding a default,” the National Treasury said. “Improving the financial positions of the airline through recapitalization has been on government’s agenda for a while, as outlined in February budget.”
The debt-laden airline has 16.7 billion rand ($1.3 billion) of loans, most of it held by Standard Chartered, Standard Bank Group Ltd., Citigroup Inc., Nedbank Group Ltd., Absa Bank Ltd. and Rand Merchant Bank, according to a document handed to lawmakers on June 27. The carrier has 19.1 billion rand in state guarantees, a safety net that is effectively keeping SAA solvent after six consecutive unprofitable years.
The National Treasury also said it will work to ensure airline’s turnaround strategy is implemented.