South African Airways will be meeting local lenders today (7 Nov) to refinance its outstanding loans amounting 6 billion rand ($423 million).
According to Bloomberg, the banks have in principle agreed to extend the loan terms, and if granted, the going-concern status will enable South African Airways to renegotiate longer-term contracts.
SAA has been recoding losses consecutively for the last six years and this year government infused 5 billion Rand to avoid SAA from defaulting on debt owned to CitiGroup and Standard Charted banks.
Also the another 10 billion rand was granted as recapitalisation in the current fiscal year to settle foreign debts amounting more than 5 billion Rand and to pay local contractors.
In an interview with Bloomberg, Vuyani Jarana, CEO of SAA said, “SAA, which doesn’t have any bonds, has no plans to enter the debt market” .. and when asked about competing with Emirates, “We are strong in domestic market and of course we need to focus on international routes to compete” he said.