JOHANNESBUG, Reports that Standard Chartered Bank has declined to renew its loan facilities to South African Airways (SAA) and that repayment of these loans has been demanded may only be the tip of the iceberg and government might be forced to foot the bill, says the Democratic Alliance (DA), the country’s main opposition party.
DA Spokesperson Alf Lees said here Sunday that national flag carrier SAA had listed an amount of more than 8.887 billion Rand (about 694 million US dollars) which need to be repaid in 2017 and 2018. However, the maturity dates of repayments amounting to more than 6.0 billion Rand had already passed.
Lees said the DA wanted to know from Finance Minister Malusi Gigaba whether the overdue loans had been repaid or rolled over and how close SAA was to default, which could result in lenders calling in government guarantees.
“All of SAA’s loans are backed by government guarantees, and in total they now amount to 19.1 billion Rand. If SAA has failed to repay some of these loans it could force other creditors to recall their loans, which would then necessitate the government stepping in and pay,” he added
“This money would ultimately be taken from the public purse and could have dire consequences for the sovereign rating status of South Africa.”
Source: NAM NEWS NETWORK