The fate of South African Airways (SA, Johannesburg O.R. Tambo) hangs in the balance again with its administrators urgently needing short-term State funding for the business rescue process to succeed.

Administrators Les Matuson and Siviwe Dongwana in a statement on September 10, 2020 "found it prudent to advise affected persons of the status of the company’s dire financial position". They warned that "the existing funds, which are available for operational expenditure...are near depletion and thus the availability of the requisite funding to the company during the course of next week will determine whether the business rescue proceedings can continue".

The administrators need at least ZAR5 billion rand (USD300 million) in working capital, as well as to pay severance packages, and post-commencement creditors, before they can discharge the airline from business rescue.

"In the ongoing engagements on this issue, Government has continued to express its commitment to making this funding available and have undertaken to do so during the course of next week," they said.

Stakeholders would be advised on September 17, 2020, if the funds had been received, failing which another creditors' meeting would be convened on September 18, 2020, to consider the way forward.

They confirmed the government so far had advanced about ZAR9.3 billion (USD557 million) of ZAR16.4 billion (USD900 million) to repay various lenders, as set out in the business rescue plan.

They also confirmed that 33 of 40 aircraft leases had been terminated; and hoped to cancel the remaining aircraft leases by the end of September 2020, "failing which the company will have to institute legal proceedings to cancel onerous aircraft leases".

South Africa's Department of Public Enterprises (DPE), in response, issued a statement saying a decision on the sources of funding would be announced soon. It said DPE and National Treasury, under the guidance of an inter-ministerial committee tasked with overseeing the restructuring of SAA, were working hard to finalise the process.

DPE and the appointed transaction advisor, Rand Merchant Bank, were still assessing "unsolicited expressions of interest from private sector funders, equity investors and strategic partners". "A number of engagements have been undertaken with the potential partners, and the interest is encouraging that a suitable long-term investor will be found to enable the relaunch of the airline and its subsidiary businesses and divisions. The department remains confident that a solution will be found in time to avoid (the) liquidation of SAA," DPE said.

SAA has been in business rescue since December. Creditors at the end of July approved a business rescue plan that requires the government to raise at least ZAR10 billion (USD598 million) over the next three years to implement it, in addition to its existing commitment to lenders.

Given the economic climate, South Africa's Finance Ministry has refused to fund another bailout of the stricken state carrier. However, the government has committed to "mobilising" the necessary funds and is looking at "diversifying" SAA's investor base. It previously claimed to have received at least ten unsolicited expressions of interest and has reportedly engaged with Ethiopian Airlines (ET, Addis Ababa) about a pan-African partnership.