South African Airways keeps flying on $170mln loan

May 6, 2013
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A plane propellor/FILE
A plane propellor/FILE

, JOHANNESBURG, May 6 – South Africa’s embattled state airline has borrowed about $170 million to cover operating costs amid crippling financial trouble, a spokesman said on Monday.

National carrier South African Airways (SAA) raised the 1.5 billion rand ($167 million, 128 million euro), a company spokesman told AFP.

“All the legal documents are being finalised and we are waiting for the minister’s final approval,” chief financial officer Wolf Meyer had told Business Day newspaper earlier.

The funds, expected by Monday, had been raised from two local banks, the newspaper reported.

The money will keep the company afloat amid the global economic downturn, high fuel prices and a leadership crisis.

Last October the South African government gave SAA a five billion-rand ($560 million-, 426 million-euro) guarantee over two years to finance a turnaround.

In April the government, the carrier’s sole owner, named a new chief executive following a rash of resignations since September last year.

Last year, the airline ran up operating losses of 1.3 billion rand (108 million euros; $142 million) for the financial year 2011-2012.

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