1. SAA currently has in place a R14.4 billion government guarantee facility against which the company can raise funding. Although the facility has currently been almost fully utilised to raise debt, as the debt matures or is repaid, SAA can utilise the guarantees that are freed up as a result, to raise further funding.
2. There is no requirement for SAA to obtain permission from National Treasury to issue a request for proposal (RFP) to raise financing.
Nevertheless, there are existing conditions that have been placed by National Treasury that relate to the process and terms of obtaining funding with which the airline is required to adhere. These are as follows:
(a) The Chief Procurement Officer has required that all tenders above R10 million must be reviewed by the National Treasury before appointment letters are issued.
(b) Among the conditions that have been attached to the government guarantee facility that has been provided to SAA, there is a requirement that National Treasury approve the terms of financing raised against the guarantee before any agreements are concluded.
Once SAA has identified sources of financing and the legal agreements have been negotiated, including the guarantee agreement, the airline will be required to submit all the relevant documents to the Minister of Finance for his consideration, including those relating to the above mentioned conditions.
3. There is no requirement for SAA to obtain permission from National Treasury to issue a request for proposal (RFP) to raise financing. Hence:
(a) National Treasury will not be taking steps to “stop the funding process from proceeding”.
(b) SAA is not required to provide any reasons.
4. (a) and (b) The funds are primarily required to refinance existing debt facilities. Should there be delays in concluding financing, all options will be considered. These are likely to include, SAA seeking to extend or roll-over existing facilities.