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South Africa urges creditors to back rescue plan

South Africa urges creditors to back rescue plan

South Africa

<p><strong>South Africa’s public enterprises ministry on Wednesday urged creditors to back a rescue plan for cash-strapped South African Airways (<span class="caps">SAA</span>).</strong></p> <p>Creditors are due to vote on the restructuring plan on Thursday, but one of the creditors – private airline Airlink – is in court on Wednesday trying to prevent the vote from happening.</p> <p>The plan was published by the state-owned SAA’s administrators last week after repeated delays and months of wrangling.</p> <p>The government has been applying pressure on the administrators to salvage <span class="caps">SAA</span> in some form even though it has not made a profit since 2011 and has relied on bailouts.</p> <p>The Department of Public Enterprises (<span class="caps">DPE</span>) said in a statement: “DPE believes the ​approval of the business rescue plan ​would help creditors and employees to be co-creators of a new airline.”</p> <p>The rescue plan proposed the government find at least 10 billion rand ($577.6 million) in new funds to restructure <span class="caps">SAA</span>, pay off some creditors and fund layoff costs. It also envisages scaling back the airline’s fleet while keeping most of its domestic and international routes.</p> <p>Trade unions have voiced their opposition to the plan because of the thousands of job cuts it entails.</p> <p>It is not yet clear where funding for a restructured <span class="caps">SAA</span> would come from. The <span class="caps">DPE</span> said on Tuesday it had received unsolicited proposals from private sector funders, private equity investors and potential partners.</p> <p>Finance Minister Tito Mboweni is scheduled to deliver an emergency coronavirus budget later on Wednesday and could announce more government funding for <span class="caps">SAA</span>. </p> <p><strong><em>Agencies</em></strong></p>
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