Johannesburg – South Africa’s National Treasury has been working with the embattled national airline to ensure it has enough cash to meet its obligations.

South African Airways (SAA) faced a cash crunch earlier this month when it emerged that US banking group Citigroup cancelled a R250 million banking facility for the airline in December.

SAA, which is technically insolvent, has been surviving on about R14 billion of government-debt guarantees and last posted a full-year profit in 2011, Bloomberg has reported.

The company, which has requested a further guarantee from the National Treasury, has had seven acting or permanent chief executive officers in less than four years.

Now National Treasury says it has already taken several steps, including repatriating funds from overseas and making efforts to secure further short-term bridging facilities. It did not indicate how much money was overseas.

National Treasury says, of the R14.4 billion in guarantees extended to SAA, the airline has R2 billion it has not yet used, which can be tapped for additional financing.

“National Treasury has been in contact with several of the lenders currently providing SAA with unguaranteed short term facilities and indications are that the banks are not intending to withdraw their facilities at this time. Regular engagements with lenders have been taking place since 2014 and will continue until the airline is stabilised,” the department said in a statement.

SAA submitted its request for a going concern guarantee during December 2015. National Treasury is currently considering this request, it says.

Treasury notes SAA cannot wrap up its financial statements on a going basis status without this guarantee.

Under finance minister, National Treasury aims to ensure SAA is stabilised in the short-term and has cash to meet its requirements and that a full board and permanent CEO are appointed.

It also wants to see SAA return “to a stronger financial footing in the medium- to longer-term”.

“The goal in the longer term is to ensure that the airline is able to operate without support from the state, as should be the case with all State-Owned Entities,” said Gordhan. He added SAA is open for business and will remain so.

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