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South African Airways

JOHANNESBURG. – South African Airways (SAA) has been provided with state funds to help it repay loans of about 2,3 billion rand ($176 million) to Standard Chartered, the government said on Saturday.

The airline faced around nine billion rand of debt maturing at the end of June involving six or seven lenders, according to the Treasury.
On Thursday the Treasury told lawmakers it was in discussions with lenders to roll over the nine billion owed to them.

In a statement issued on behalf of the Treasury, the government said the funds provided to SAA had been sourced from the National Revenue Fund (NRF), which under law allows any minister to authorise the use of funds for expenditure of an exceptional nature.

“A default by the airline would have triggered a call on the guarantee, leading to an outflow from the NRF and possibly resulting in elevated perceptions of risk related to the rest of SAA’s guaranteed debt, the statement said.

SAA already relies on government guarantees of about 20 billion rand to keep it solvent. It has been cited by all three major rating agencies repeatedly as a threat to SA’s. economy. – Reuters.