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Development bank lends SAA R3.5billion

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The Democratic Alliance (DA) said on Tuesday it would write to the Minister of Trade and Industry, Ibrahim Patel, to obtain full details of the reported loan of R3.5 billion that the Development Bank of Southern Africa (DBSA) had allegedly made available to SAA.

“Given the fact that the Bank falls under the mandate of Minister Patel, the onus rests on him to come clean on the details of this loan,” the DA said.

“This is simply a disguised taxpayer bailout of the bankrupt SAA and it takes money that should be invested by DBSA in real and sustainable development projects that will create jobs for the 10 million unemployed and largely destitute South Africans and throws it into the bankrupt SAA black hole,” the DA said.

The joint SAA Business Rescue Practitioners (BRPs), Les Matuson and Siviwe Dongwana, announced in a statement on Tuesday they had secured the R3.5 billion from DBSA with R2 billion immediate drawdown to meet the airline’s short term liquidity requirements until the business rescue plan is adopted.

“This Plan is needed in terms of the Companies Act and is the responsibility of the practitioners,” the BRPs said.

Working with the departments of Public Enterprises and national Treasury, the practitioners obtained the funds on the back of the business rescue process which began on 5 December 2019, with the local commercial banks providing the initial PCF of R2 billion in addition to the existing exposures to SAA.

The BRPs said potential funders were also considering funding for the restructuring phase after the adoption of the Plan.

“SAA’s restructuring will provide an opportunity to develop a sustainable, competitive and efficient airline with a strategic equity partner remaining the objective of government through this exercise and will result in the preservation of jobs wherever possible,” the statement said.

“SAA is a key strategic asset which needs to be positioned to provide reliable connectivity to markets within South Africa, the African continent as well as servicing selected international routes.

“Stakeholders of the airline should now have comfort that the rescue process is on a significantly sounder footing, and that passengers and travel agencies and airline partners may continue to book air travel on SAA with confidence.”

Source: ANA

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