South Africa seeks SAA rescue funds from its own agencies

South Africa’s government is in talks with two state agencies to try and secure the 10.5b rand ($650m) needed to restart its insolvent national airline, people familiar with the situation said. Money is being sought from the Development Bank of Southern Africa and the Public Investment Corp., which oversees more than 2.1t rand of mainly state pension funds, the people said, asking not to be identified because an agreement has yet to be reached. The two firms didn’t immediately respond to requests for comment. The administrators of SAA said the government had again promised to find the funding that will be used to pay severance packages, among other things. “The timelines are critical for the decision on whether SAA is liquidated, wound up as a going concern or is able to continue to trade,” Louise Brugman, the administrators’ spokeswoman, said by phone from Johannesburg on Friday. “The 2020 budget said that the money for restructuring costs will be found through a reprioritization process,” Public Enterprises Minister Pravin Gordhan, who has been championing efforts to save SAA, said in a text message. “That will be sorted out next week.” While the DBSA, which has previously funded SAA, may provide more money, the PIC is resisting efforts to tap it for cash, citing its already significant exposure to struggling state entities, one of the people said. Ethiopian Airlines Group is in talks with SAA over providing assistance, people familiar with the situation have said previously. The Addis Ababa-based carrier is seeking control, possibly in the form of a management contract, and that may be a sticking point, the people said.<br/>