PROMISSORY NOTE

…Gordhan, Mboweni commit in letter to obtain funding for SAA

- Minister of Public Enterprises Pravin Gordhan and Finance Minister Tito Mboweni have committed to obtain funding for the state-owned airline’s short, medium and long-term requirements in a letter in a letter sent to the business rescue practitioners of South African Airways late on Wednesday evening.

The letter, which does not mention any particular amounts, was requested by the business rescue practitioners. It does not say where the funding will come from.

The Department of Public Enterprises has repeatedly said in the past its aim is to create a viable and sustainable new South African national airline. In terms of a business rescue plan accepted by the creditors of the flag carrier on Tuesday, a letter of commitment of funding had to be provided to the rescue practitioners by Wednesday for the plan to proceed.

The rescue plan requires about R10.3 billion in new funding for, among other things, restarting operations (R2.8 billion for July and August) and severance packages for employees (about R2 billion).

The department said in a statement yesterday that it welcomes the commitment by National Treasury that the government will support and source funding for the plan which will result in “the emergence of a new viable, sustainable, competitive national airline.”

According to the DPE, the funding commitment gives effect to Cabinet’s previous endorsement of SAA’s business rescue plan. Cabinet’s position is that “it supports the proposal for a new airline and the concerted effort to mobilise funding from various sources, including from potential equity partners for the uptake of the new airline.” – NEWS24.