SAA Borrows R1.5bn for Operations

According to fin24, South African Airways has borrowed R1.5bn from two banks to keep operations running while the airline comes to grip with high fuel prices and its loss-making long-haul business. Chief financial officer Wolf Meyer told South Africa’s Business Day that this was until the country’s cabinet adopted the airline's turnaround plans. SAA had used a R5bn state guarantee extended to it last year to secure the loan. Meyer said all the legal documents for the loans were being finalised and awaiting the minister's final approval. The loans were believed to have been extended by Rand Merchant Bank and Investec, the newspaper reported. However, Meyer refused to confirm this, and told Business Day only that the loan was split "50-50" between two local banks. "We require it (the loans) for working capital... this was always our plan to use part of the guarantee to raise money," he was quoted as saying. SAA would repay the loan once it had gone ahead with its bond issue.