Having recently postponed its planned USD160million (ZAR1.5 billion) bond sale originally slated for March, South African Airways (SA) has decided to borrow the ZAR1.5billion from two local banks, claimed to be Rand Merchant Bank and Investec as a means of keeping operations going while cabinet considers the carrier's strategic turnaround plan #9.
According to South African press reports, SAA has used a USD660million (ZAR5billion) state guarantee extended to it last year to secure the loan as a means of "providing working capital to keep operations running while SAA grappled with high fuel prices and its loss-making, long-haul business in a highly competitive market.""All the legal documents (for the loans) are being finalised and we are waiting for the minister's final approval," SAA's chief financial officer, Wolf Meyer, told BusinessDay. "The cash will be available today [Friday] or Monday."
Source [Mail & Guardian]
Meyer said SAA had also received a "good rate" on the loans because of the guarantee.
