SAA’s astonishing fund-raising proposal – anyone wanting to blow $1.1bn in a hurry?

Sometimes ignorance beggars belief. In November last year, respected financial director at South African Airways, Wolf Meyer, threw in the towel. Now FD of Saudi Air, Meyer was unable to function in an environment where the politically appointed chairman chopped and changed management to her plundering. Earlier this year the airline’s Treasurer Cynthia Stimpel was suspended for merely questioning why an unknown “transaction advisor” would be paid R256m, a multiple of what major banks would charge for the same service. The international travel media has now jumped onto the story, publishing articles about the airline’s pending bankruptcy. In among all this chaos, the seemingly impervious SAA management has published a formal invitation for funders to lend it R16bn. Global Airline sector blogger Ben Schlappig expressed it well with a suggestion: “If anyone has over a billion dollars they have no use for that they’re looking to set on fire, this offer is for you…” Being American, he’s probably not aware that South Africa’s State pension fund has the means to provide the ready. And the incentive of loyalty to political masters. There are none so blind… – Alec Hogg

SAA RFP

JOHANNESBURG, Aug 29 (Reuters) – South Africa’s cash-strapped national carrier plans to raise 16 billion rand ($1 billion) from banks and other financial institutions, a newspaper notice showed, days after saying it could pay its debts.

State-owned South African Airlines is seeking secured and unsecured funding with a 3 to 15 year duration and wants to start drawing down the amount within two weeks of signing the loan agreement, it said in the notice published in the Sunday Times newspaper.

“Three drawdowns are envisaged starting end October,” the firm said, adding that bidders could submit proposals for part or all of the required funding from Monday until Sept. 16.

“South African Airways requires funding to meet its working and capital requirements as well as to consolidate its current debt portfolio,” the airline said.

The airline’s spokesman Tlali Tlali could not immediately comment when reached by Reuters.

Hong Kong’s tax authorities last week threatened to ground SAA planes if the airline did not provide financial statements by Sept. 6.

The airline has failed to submit financial statements for the past two years, with results for 2015/16 held back by Treasury’s refusal to grant the loss-making carrier 5 billion rand in additional guarantees.

The opposition Democratic Alliance on Friday called for a parliamentary meeting to work out how to prevent the airline from missing payments to creditors, but SAA has said it was able to pay its debts.

Comments from the Biznews Facebook page

FB_Comments_SAA_August_2016

(Visited 1 times, 1 visits today)