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UPDATE 1-S.Africa president says SAA must enter business rescue - sources


UPDATE 1-S.Africa president says SAA must enter business rescue - sources
Image Credit: Twitter(@PresidencyZA)

South Africa's President Cyril Ramaphosa on Wednesday instructed the government to urgently put its failing state-owned national airline SAA into business rescue, a deputy minister told Reuters.

SAA, which has not made a profit since 2011 and is dependent on government bailouts to remain solvent, suffered a crippling strike last month forced SAA to cancel hundreds of flights and pushed it to the brink of collapse. A deputy minister, who asked not to be named because of the sensitivity of the subject, told Reuters he had received the letter from the secretary of the cabinet earlier on Wednesday.

State broadcaster SABC also reported that SAA would have to go into rescue, citing a leaked memo. Ramaphosa's spokeswoman Khusela Diko did not immediately respond to a request for comment. But she was cited by Times Live online news service saying that the letter was official correspondence to members of the cabinet and deputy ministers.

SAA spokesman Tlali Tlali could not be reached for comment and public enterprises ministry spokesman Sam Mkokeli declined to comment. SAA lost more than 10.4 billion rands ($700 million) in the past two financial years, documents show.

Business rescue would hand over control to a specialized prac­ti­tioner who then tries to restore the com­pany in order to avoid liquidation, usually by making substantial cost cuts.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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