South African Airways is seeking 16 billion rand ($1.1 billion) in long-term funding that the unprofitable government-owned carrier said will be used for working and capital expenditure and to help manage outstanding debt.
— Rand Daily Mail (@rdm_za) August 29, 2016
The airline will need to access the funding two weeks after the signing of loan documentation, SAA said in a request for proposals from financial institutions, published in the Johannesburg-based Sunday Times newspaper. The company is seeking rand-denominated secured and unsecured funding with a three- to 15-year tenure and has set a closing date of Sept. 16 for proposals.
SAA, which last reported a full-year profit in 2011, is dependent on government-guaranteed loans to stay operating and is awaiting a decision by the National Treasury on additional support before it can file overdue financial statements for the year through March 2015.
The airline had previously appointed little-known BnP Capital as financial services adviser to source funding on its behalf, yet reversed the decision after criticism and a legal challenge from the Organization Undoing Tax Abuse. The South African lobby group said Johannesburg-based BnP had had its Financial Services Board license suspended and that SAA had not followed a competitive bidding process.
FSB accreditation is a “critical requirement” for non-banking financial services intermediaries, SAA said in the request for proposal this week.