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South African Airways' suppliers are reducing payment delays to reduce the risk of loss from the collapse of the struggling state-owned carrier, which is struggling to pay R 5 billion ($ 361 million) to lenders here the end of the month.
Companies with SAA contracts reduce settlement times to 21 days to 7 days as creditors reach their deadline, said Acting CFO Deon Fredericks in Cape Town.
The National Treasury is using it to facilitate payment, as the process is "on track", he said.
"The problem with SAA's transformation is that the board needs to focus on funding issues rather than on the operational side," said Fredericks, who launched a 12-month secondment to the company. Telkom SA SOC Ltd fixed telephony last month.
SAA is one of the public companies in financial difficulty after years of scandal mismanagement and corruption while Jacob Zuma was president. The carrier made a profit last time in 2011 and is counting on government support to stay in operation.
Fredericks was brought to work with President and CEO Vuyani Jarana as the airline was looking for a permanent successor to former CFO Phumeza Nhantsi, who had been fired in June.
Miss to win
If the payment of R5 billion is made, then SAA will have to find R9.2 billion in short-term borrowings by the end of March. While the Treasury has allocated SAA 5 billion in the medium-term budget last month to repay the debt, the Johannesburg-based airline has been informed of responsibility for any future restructuring.
SAA is also expected to face a 3.5 billion rand shortfall at the end of March, according to a presentation to legislators.
"Banks are no longer as friendly as before," Pravin Gordhan, Minister of Public Enterprises, told Cape Town legislators on Tuesday.
"They want not only the government guarantee, but also the plan to transform the SAA and determine if they have the skills to do it."
Read: SAA says it will be profitable by 2021 – here's how much money it says it needs in the first place
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