SAA has possibly defaulted on billions in loans: DA

18 June 2017 - 15:53 By Timeslive
An SAA Aircraft on the runway at the O.R.Tambo International Airport. File photo.
An SAA Aircraft on the runway at the O.R.Tambo International Airport. File photo.
Image: Gallo Images / The Times / Alon Skuy

Reports on Sunday that Standard Chartered Bank has declined to renew its loan facilities to SAA and that repayment of these loans has been demanded‚ may only be the tip of the iceberg‚ according to the Democratic Alliance.

It said that a repayment schedule‚ SAA has listed R 8.887 billion repayable in 2017/18‚ yet some of the maturity dates had in fact passed.

Key dates that were already past included:

- R0.3-billion due to Standard Bank on 30 December 2016;

- R1-billion to Standard Bank on 30 December 2016;

- R1-billion owed to Standard Chartered on 27 January 2017;

- R1-billion owed to Absa on 8 December 2016;

- R1-billion owed to Standard Chartered on 22 December 2016;

- R2.25-billion owed to Various Phoenix on 28 April 2017; and

- R0.8-billion owed to Various GBF on 28 April 2017.

DA deputy spokesman in finance Alf Lees said he would write to Finance Minister‚ Malusi Gigaba‚ to request that he urgently answer two vital questions.

The first was whether or not the other loans already overdue had been repaid and/or rolled over? The second was how close SAA was to default resulting in lenders calling in government guarantees?

All of SAA’s loans were backed by government guarantees that in total now amounted to R 19‚1-billion‚ Lees said.

“If SAA has failed to repay some of these loans‚ it could force other creditors to recall their loans‚ which would then necessitate the government to step in and pay. This money would ultimately be taken from the public purse and could have dire consequences for the sovereign rating status of South Africa‚ he cautioned.

“The fact is that the only way out of this mess is for SAA to apply for business rescue where robust cost reductions can be implemented.

“A successful business rescue and the prevention of the government guarantees being called in would be have to lead to a full‚ or at very least a majority privatisation‚ of SAA in order to for SAA to survive in the long-term and importantly to release the South African taxpayer from ever having to meet the R 19‚1 billion government guarantees‚” Lees added.

- TimesLIVE