South African Airways Gets Government Help After Citibank Ends Credit Facility

South African Airways plane.

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“We confirm that Citibank has withdrawn SAA’s credit facility,” Tlali said.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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