National carrier asks lenders for $1B

August 29, 2016 6:11 AM

Hong Kong's tax authorities last week threatened to ground SAA planes if the airline did not provide financial statements by Sept. 6.

Passengers board a South African Airways Boeing 737 aircraft at the Kamuzu International Airport in Lilongwe October 25, 2009.

South Africa's cash-strapped national carrier plans to raise 16 billion rand ($1 billion) from banks and other financial institutions, a newspaper notice showed, days after saying it could pay its debts.

State-owned South African Airlines is seeking secured and unsecured funding with a 3 to 15 year duration and wants to start drawing down the amount within two weeks of signing the loan agreement, it said in the notice published in the Sunday Times newspaper.

"Three drawdowns are envisaged starting end October," the firm said, adding that bidders could submit proposals for part or all of the required funding from Monday until Sept. 16.

"South African Airways requires funding to meet its working and capital requirements as well as to consolidate its current debt portfolio," the airline said.

The airline's spokesman Tlali Tlali could not immediately comment when reached by Reuters.

The airline has failed to submit financial statements for the past two years, with results for 2015/16 held back by Treasury's refusal to grant the loss-making carrier 5 billion rand in additional guarantees.

The opposition Democratic Alliance on Friday called for a parliamentary meeting to work out how to prevent the airline from missing payments to creditors, but SAA has said it was able to pay its debts.

($1 = 14.3118 rand)