South Africa’s national carrier, South African Airways is finding it hard to repay its GBP545.52 million loan it owes several domestic lenders.
State sponsored South African Airways is heavily indebted to major local lenders such as Standard Chartered Bank which according to the Democratic Alliance (the country’s major opposition party), has refused to renew its loan facility to the embattled airline.
South African Airways is surviving on government debt guarantees of almost ZAR20 billion which international rating agencies have cited as a threat to the country’s financial system and the economy at large.
The airline’s chief financial officer, Phumeza Nhantsi, said about ZAR9 billion debt will be maturing in the next few days owed to close to seven lenders who have not being named. He hinted that the airline is looking at raising more debt capital from the Public Investment Corporation, one of the largest investors in MTN.
Apart from South African Airways, Kenya Airways, a national carrier is also indebted in the last three years.