× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

South African Airways puts $1 billion debt restructuring on hold

By Reuters | Jul 17th 2016 | 2 min read
By Reuters | July 17th 2016

JOHANNESBURG: South African Airways (SAA) said on Sunday it had put on hold a deal to restructure 15 billion rand ($1 billion) of debt after questions were raised about the awarding of the work.

Local media reported this month that the board of SAA went against the advice of its own treasury by agreeing to pay boutique financier BnP Capital a 256 million rand ($17.56 million) success fee to advise the airline on debt restructuring and fund raising without putting the contract out to tender.

SAA spokesman Tlali Tlali said the contract was awarded without tender due to urgent loan repayments due at the end of June, but denied that the fee was set at 256 million rand.

"We have given BnP Capital an opportunity to respond to matters we raised with them and expect them to revert during the course of next week. Until we have received a response from them and have considered same, contracting between the parties will be stayed," Tlali said.

SAA has been sustained by state guarantees of around 14.4 billion rand and has asked for an additional 5 billion rand from the Treasury.

Finance Minister Pravin Gordhan last week asked parliament to postpone the release of SAA's 2015 earnings report until September, the fourth such request as the Treasury mulls whether to extend more guarantees to the company.

The carrier has been marred by controversy and financial mismanagement for years and has been singled out by ratings agencies among other state companies as a risk to the country's investment grade status.

Share this story
Top 10 start-ups at innovation week to receive funding
Start-up enterprises that will emerge top in the upcoming Nairobi Innovation Week stand a chance to receive a boon from the country's multi-million-shilling corporates.
China rejected Kenya's request for Sh32.8b debt moratorium
China is Kenya’s largest bilateral lender with an outstanding debt of Sh692 billion.