Troubled South African Airways has been placed into a local form of bankruptcy protection, South Africa’s Department of Public Enterprises has announced.
It will now enter a business rescue process and receive 4 billion Rand (£207 million), 2 billion from the government and 2 billion from existing lenders.
Public enterprises minister Pravin Gordhan said it was “not a bailout”, instead calling it “the provision of financial assistance to facilitate a radical restructure of the airline.”
State-owned SAA has not made a profit since 2011 and relies on government support. It has reportedly lost more than 28 billion Rand (£1.5 billion) over the past 13 years.
Its future appeared to be in the balance after a strike over wages last month forced it to cancel most flights.
“This is the optimal mechanism to restore confidence in SAA and to safeguard the good assets of SAA and help to restructure and reposition the entity into one that is stronger, more sustainable and able to grow and attract an equity partner,” Gordhan commented.
The airline’s former CEO Vuyani Jarana resigned earlier this year, saying his turnaround strategy was being undermined by a lack of state funding and too much bureaucracy.
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