South African government agrees to fund SAA rescue, draft plan says

The South African government has agreed to fund a restructuring of South African Airways (SAA), if a business rescue plan for the struggling state-owned airline is adopted, a copy of the draft plan showed on Monday. SAA entered business rescue - a local form of bankruptcy protection in December, after which administrators took over the running of the airline and have been working on a plan to save the business.

The draft plan said the government had agreed to make a working capital injection, which the administrators estimated at not less than 2 billion rands ($114.86 million), fund employee layoffs, which could cost up to 2 billion rands, and make an allocation of at least 600 million rands towards the repayment of general concurrent creditors. A spokeswoman for the administrators confirmed the draft plan was genuine.

($1 = 17.4132 rand)