Treasury struggles to fund SAA bailout

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South Africa’s National Treasury is trying to find additional funding for the embattled state airline ahead of a Jan. 19 deadline, Finance Minister Tito Mboweni said at a briefing in Johannesburg on Thursday.

“The National Treasury has provided financial support to the best of our abilities,” Mboweni said. “Given the serious financial and operational challenges facing South Africa, the Department of Public Enterprises together with the National Treasury, is working closely with the management of South African Airways and the business rescue practitioner have arrived at a point where it is clear that certain decisions need to be taken about what to do.”

SAA has not received the 2 billion rand ($139 million) from National Treasury that was needed to keep the carrier operational, Business Day reported, citing a spokeswoman for the airline’s administrator.

Treasury has been unable to sell assets quickly enough to fund SAA’s needs and the airline may face flight suspensions and liquidation from Jan. 19 if it doesn’t receive the added bailout money, according to the Johannesburg-based newspaper.

In December SAA was placed under voluntary business rescue, a local form of bankruptcy protection in which an administrator takes charge and tries to turn it around. Once that process was underway, the government said it would give it a 2 billion-rand bailout while providing guarantees to raise the same amount in new loans.

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