Debt-ridden South African Airways has until the end of October 2017 to pay off a major debt obligation that might lead to its shut down should the company default. The debt repayment of 5 billion rand ($374 million) owed to domestic lenders has been pushed to the end of October from the end of September,
The debt had originally been due to be paid at the end of September. South African Airways (SAA) was last month provided with emergency state funds from the Treasury to repay 3 billion rand in loans from Citibank amid concerns the airline would default on its payments.
“SAA must begin to function as a commercial entity and it’s starting to make those hard decisions right now.”, Finance Minister Malusi Gigaba said in a report to Parliament on Friday.
At the same time, SAA won’t have to repay any of the R10 billion it will receive in guarantees and cash from government coffers this year.
The IMF forecasts South Africa’s economy will grow by 0.7 percent this year versus 0.3 percent in 2016. ($1 = 13.3800 rand).