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'Government has not committed to fund SAA rescue plan', Tito Mboweni says

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The South African government has not committed to fund a restructuring plan for struggling South African Airways (SAA), Finance Minister Tito Mboweni said in court papers seen by Reuters on Tuesday.

Mboweni and Public Enterprises Minister Pravin Gordhan sent a letter last week to SAA's administrators committing to"mobilising funding" for the plan.The South African government has not committed to fund a restructuring plan for struggling South African Airways , Finance Minister Tito Mboweni said in court papers on Tuesday.

Administrators took over SAA in December after almost a decade of financial losses, and last week creditors approved the restructuring plan, which requires at least R1-bln of new funds, on the understanding the government would find the necessary cash. Mboweni said in an affidavit filed in the High Court that funding options the government might explore included approaching institutions for investment of pension funds, private equity or other partners who might want a shareholding in a restructured SAA.

The minister was responding to a court case launched by opposition party the Democratic Alliance, which wants to block Mboweni from using emergency powers to channel more public funds to rescue the airline. Mboweni and Public Enterprises Minister Pravin Gordhan sent a letter last week to SAA's administrators committing to"mobilising funding" for the plan.

 

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