The South African Treasury has confirmed Citibank has canceled a ZAR250 million (USD15 million) loan facility to state-owned South African Airways (SA, Johannesburg O.R. Tambo), thus adding to the airline's woes.

Treasury spokeswoman Phumza Macanda told Reuters in a statement that in light of the development, government was "working closely with SAA" to ensure it has sufficient liquidity.

An internal memo, leaked to the South African press in November last year, warned the carrier may have to enter the local equivalent of US Chapter 11 bankruptcy protection should its sole shareholder, the state, fail to shore up its capital reserves. The board has already asked the South African Treasury for a guarantee of at least ZAR4 billion (USD243 million) for it to finalise its 2014/15 financial statements.

Beset with leadership and financial problems, SAA's woes have had a serious impact on South Africa's political and economic landscape in recent months. In mid-December, a contentious deal involving the conversion of A320s to A330s on order from Airbus (AIB, Toulouse Blagnac) led to the removal of former Minister of Finance, Nhlanhla Nene. The move rattled markets to the extent that the South African Rand lost almost 10% of its value against the US Dollar over a period of 6 days.