Govt uses National Revenue Fund to bail out SAA

The South African government on Friday approved the transfer of funds from the National Revenue Fund (NRF) to troubled national carrier South African Airways (SAA) to allow the airline to meet its debt obligations to Citibank and avoid a default. SAA has to meet its repayment obligations on a Citibank loan amounting to R6.8-billion in total by the end of September, as it also wrestles with the prospect of being unable to pay salaries because of a severe cash crunch. CitiBank has also cancelled SAA’s R250-million short-term banking facility due to lack of government guarantee, leaving the airline without cash and desperately trying to find local bridging finance.