UPDATE 2-South African Airways needs state cash next week -administrators

(Adds government comment)

JOHANNESBURG, Sept 10 (Reuters) – South African Airways needs short-term funding from the government by the end of next week for the state carrier’s business rescue process to continue, its administrators said on Thursday.

“It is prudent to advise affected persons of the company’s dire financial position,” they said in a statement.

“The existing funds which are available for operational expenditure …are near depletion.”

The administrators took control of SAA in December after almost a decade of financial losses and published their restructuring plan for the airline in June following repeated delays and wrangling over its future.

They plan to scale back the fleet and cut jobs but at least 10 billion rand ($598 million) in new funds is needed.

The government has yet to clarify where it will find the money but said in a statement on Thursday that a decision on the sources of funding would be announced “soon”.

“A number of engagements have been undertaken with the potential partners, and the interest is encouraging that a suitable long-term investor will be found to enable the relaunch of the airline and its subsidiary businesses and divisions,” the Department of Public Enterprises said.

The administrators said the government had so far advanced 9.3 billion rand to pay various lenders, but that the remaining portion of short-term funding had yet to materialise.

They said if they are not satisfied that sufficient progress has been made on advancing the funding, a meeting of creditors will be convened on September 18 “to engage with affected persons on this issue”.

Source: Read Full Article