South Africa’s state-owned airline has been placed into bankruptcy protection, as the nation tries to stop it falling into liquidation.
South African Airways (SAA), which has suffered from years of state corruption, has entered the workout process, an alternative to bankruptcy.
It is the first time a South African state-owned company has been forced to take such drastic measures since the end of the apartheid in 1994.
Cyril Ramaphosa, South Africa’s President, has pledged to improve the finances of state companies that suffered under corruption under Jacob Zuma, his predecessor.
Ramaphosa’s cabinet secretary wrote to ministers on Wednesday, saying that rescue proceedings were “the only viable route open to the government to avoid an uncontrolled implosion of the airline”.
SAA has been teetering on the brink in recent days, after a recent strike left flights grounded.
“This is the optimal mechanism to restore confidence in SAA and to safeguard the good assets of SAA and help to restructure and reposition the entity into one that is stronger, more sustainable and able to grow and attract an equity partner,” said Pravin Gordhan, the minister for state-owned companies.
SAA operates flights to and from London Heathrow.
The airline is also said to be in talks with lenders including Standard Bank and Investec about funding.
Earlier this week Bloomberg reported negotiations are also taking place with Absa, Nedbank and FirstRand’s Rand Merchant Bank.
SAA has not published its financial results since 2017, when it lost £145m.
The airline was not immediately available for comment.