SAA administrators, state in guarantee impasse

The administrators of South African Airways want the government to set aside 16.4b rand ($998m) that it’s guaranteed to pay creditors. The Treasury says the current structure of its guarantees should suffice. The administrators want an agreement for the money to be paid into an escrow account -- the last outstanding issue that needs to be resolved before the carrier’s business-rescue process can be finalized -- to be signed on Monday, said the person, who spoke on condition of anonymity because the discussions aren’t public. “The government guarantee provide the necessary legal comfort that should SAA not be in a position to settle maturing debt, then government will settle this debt,” the Treasury said in a response to queries. “The existing government guarantees are legal agreements between lenders and government and any amendments thereto will have to follow a due-diligence process.” The disagreement is likely to further delay the implementation of a rescue plan for the airline and could scupper it, pushing the carrier into liquidation.<br/>