June 23, 2020 / 9:51 AM / 14 days ago

South Africa receives unsolicited proposals for new national airline

JOHANNESBURG (Reuters) - The South African government said on Tuesday it had received unsolicited proposals from private sector funders, private equity investors and potential partners for a new national airline based on struggling South African Airways (SAA).

State-owned SAA has been under a form of bankruptcy protection since December, and its administrators last week proposed a restructuring plan for which the government had to find at least 10 billion rand ($580 million) of new funds.

Creditors are due to vote on the restructuring plan on Thursday, but one of SAA’s creditors - private airline Airlink - has launched an urgent court application to try to prevent the vote from happening.

The Department of Public Enterprises, which is responsible for SAA, said in a statement: “Government is intent on pursuing credible proposals for investment and strategic partnerships with the private sector, as well as equity participation for employees”.

It did not name any of the funders, investors or partners who had expressed an interest in the new airline to emerge from the wreckage of SAA.

The state carrier has not made a profit since 2011 and has been a drain on the public purse at a time of weak economic growth.

If the restructuring plan is approved by creditors, the administrators say they need government to provide a commitment on funding by July 15.

Finance Minister Tito Mboweni is due to deliver an emergency coronavirus budget on Wednesday, when any new government funding for SAA could be revealed.

Reporting by Alexander Winning, editing by Ed Osmond

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