South African Airways Gets Government Help After Citibank Ends Credit Facility

South African Airways plane.
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South Africa’s National Treasury is working with South African Airways to ensure the company has enough liquidity to continue operating after Citigroup Inc. cancelled a short-term credit facility.

SAA will issue a statement on Tuesday that explains the impact of the cancellation, said Tlali Tlali, a spokesman for the Johannesburg-based carrier. Phumza Macanda, the Pretoria-based National Treasury’s spokeswoman, confirmed the government was working with the airline earlier on Monday.

“We confirm that Citibank has withdrawn SAA’s credit facility,” Tlali said. “We will issue a statement on Tuesday in response to this development and to enable everyone to understand what this means for SAA from a cash flow point of view.”

Citigroup on Dec. 24 cancelled a 250 million rand [$21.5 million] facility for SAA, leaving the airline without cash, Johannesburg-based Moneyweb reported, citing an internal document of the national carrier.

The lender won’t reinstate the facility without a government guarantee, the website said.

Source: Bloomberg [By Rene Vollgraaff]

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