SAA halts R15 billion debt restructuring deal
According to Reuters, the SAA board - against the advice of its own treasury - agreed to pay BnP Capital, a boutique financier, a success fee of R256 million to advise it on debt restructuring and fund raising, without putting the contract out to tender. Tlali Tlali (pictured), SAA spokesman, said the contract was awarded without tender as urgent loan repayments were due at the end of June. Tlali however denied that the fee was R256 million.
State guarantees to the tune of R14.4 billion have helped sustain the ailing national airline, which has struggled financially for many years, and which has also endured various controversies in recent months. SAA has also petitioned Treasury for a further R5 billion, while Finance Minister Pravin Gordhan recently asked parliament to postpone the release of the airline's 2015 earnings report until September this year, the fourth such request as Treasury debates whether to extend more guarantees to the company.