Takatso Aviation has welcomed R1bn allocation to SAA from finance minister Enoch Godongwana’s budget, saying it was a significant stride toward addressing the airline's legacy debt.
Godongwana announced that SAA would get a further R1bn in the 2022/23 financial year to help with outstanding obligations to creditors. "We are happy government has made this latest, significant stride towards addressing the legacy debt issue," said Takatso Aviation director Lizeka Matshekga. This, she noted, meant the parties were "closer to seeing the fulfillment by government of all the obligations emanating from the Business Rescue Process. This appropriation is progress that is significant in advancing this transaction towards closure".
The airline has a historical debt of R13.5bn and the department of public enterprises estimated that it would need R3.5bn to cover its receivership liabilities.
Takatso, the strategic equity partner that has been in talks to take up 51% of the government’s shareholding in the national carrier, said while it would assess the impact of the 2023 budget’s allocation on the transaction, a partial fulfilment of the obligation was “not what Takatso Aviation had expected”.
“The budgeted R1bn will settle some, but not all, of the outstanding amount. It, therefore, falls short of what it would have taken for the government to completely clear this obligation, which is one of the conditions for the finalisation of the SAA transaction with the strategic equity partner,” the statement said.
Matshekga said SAA’s debt burden stemmed from its past financial distress and so the parties needed to assess whether a partial fulfilment of the government’s undertaking to clear the debt changed anything in Takatso’s financing process.
“The unease Takatso Aviation funders have with signing off on the release of the funds we’re mobilising for our R3bn commitment to SAA, while the outstanding BRP debt subsists, is an issue we have highlighted time and again,” said Matshekga.
The statement said Takatso would have ongoing engagements with the government in the coming weeks to assess the final settlement of its outstanding financing obligations emanating from the business rescue process.
“We also wish to emphasise that in the context of an ever-evolving market, time is of the essence if the parties to the agreement are to seize the moment characterised by a buoyant aviation sector,” the statement said.
* This story has been updated. TimesLIVE editor.
Takatso welcomes R1bn for SAA from Godongwana’s budget
Image: File/Alon Skuy
Takatso Aviation has welcomed R1bn allocation to SAA from finance minister Enoch Godongwana’s budget, saying it was a significant stride toward addressing the airline's legacy debt.
Godongwana announced that SAA would get a further R1bn in the 2022/23 financial year to help with outstanding obligations to creditors. "We are happy government has made this latest, significant stride towards addressing the legacy debt issue," said Takatso Aviation director Lizeka Matshekga. This, she noted, meant the parties were "closer to seeing the fulfillment by government of all the obligations emanating from the Business Rescue Process. This appropriation is progress that is significant in advancing this transaction towards closure".
The airline has a historical debt of R13.5bn and the department of public enterprises estimated that it would need R3.5bn to cover its receivership liabilities.
Takatso, the strategic equity partner that has been in talks to take up 51% of the government’s shareholding in the national carrier, said while it would assess the impact of the 2023 budget’s allocation on the transaction, a partial fulfilment of the obligation was “not what Takatso Aviation had expected”.
“The budgeted R1bn will settle some, but not all, of the outstanding amount. It, therefore, falls short of what it would have taken for the government to completely clear this obligation, which is one of the conditions for the finalisation of the SAA transaction with the strategic equity partner,” the statement said.
Matshekga said SAA’s debt burden stemmed from its past financial distress and so the parties needed to assess whether a partial fulfilment of the government’s undertaking to clear the debt changed anything in Takatso’s financing process.
“The unease Takatso Aviation funders have with signing off on the release of the funds we’re mobilising for our R3bn commitment to SAA, while the outstanding BRP debt subsists, is an issue we have highlighted time and again,” said Matshekga.
The statement said Takatso would have ongoing engagements with the government in the coming weeks to assess the final settlement of its outstanding financing obligations emanating from the business rescue process.
“We also wish to emphasise that in the context of an ever-evolving market, time is of the essence if the parties to the agreement are to seize the moment characterised by a buoyant aviation sector,” the statement said.
* This story has been updated. TimesLIVE editor.
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