(Ecofin Agency) - Starting from December 2018, South African Airways (SAA) will need $540 million of working capital, managers of the South African firm indicated today November 27, 2018, in a presentation addressed to the parliament.
According to the information reported by Reuters, these funds should facilitate daily activities for the airlines company that has been facing financial difficulties for years now. In addition, about $288 million should also be raised by the company in March 2019.
This announcement was made weeks after the government decided to provide about $350 million to help the airlines company pay the debts it accumulated because of bad resources and operations management during Zuma’s presidency. About $986 million which should normally mature in March 2019 would also have to be renegotiated by the company’s managers.
"Currently we don’t have an optimal capital structure and as a result of that we are dependent on debt which is not good", said Deon Fredericks, SAA’s finance officer.
Some lenders refused to grant $253 million loan to the firm and its managers forecast SAA’s loss to reach $375 million in 2019 and $137 million in 2020. After 2020, the company will be profitable again.
Moutiou Adjibi Nourou