SAA will be using incoming capital to boost its subsidiaries

SAA will be sharing the proposed transfer of R2.7 billion with its subsidiaries in order to help them boost their financial position as the airline emerges from the business rescue process.

The Department of Public Enterprise (DPE) yesterday told Parliament that the success of SAA’s business rescue plan depended on the financial and operational health of its subsidiaries.

DPE acting director-general Melanchton Makobe said SAA subsidiaries were facing financial challenges due to SAA being put into business rescue in December 2019. The national carrier was allocated a R10.5 billion bailout to cover its business rescue process, which was concluded at the end of April.

Makobe said that Covid-19 restrictions imposed on international and domestic travel had impacted on SAA’s subsidiaries’ operations.

“If you look at the business rescue plan, it recognises the deteriorating financial position of subsidiaries and indicates that the success of the business rescue plan is dependent on the financial viability of subsidiaries,” he said.

He also said that SAA Technical would receive R1.6 billion to cover its restructuring and right-sizing.

The DPE told Parliament that the success of SAA’s business rescue plan depended on the financial and operational health of its subsidiaries.

 

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