Citibank Cancels Loan Facility To South African Airways
Citibank has canceled a 250 million rand ($15 million) loan facility to state-owned South African Airways (SAA), the Treasury said on Monday, the latest blow to the cash-strapped airline at the centre of a political storm reports Reuters
SAA's financial woes were at the centre of a political storm in December when President Jacob Zuma axed former Finance Minister Nhlanhla Nene.
South African media reported that Nene was fired because of a clash he had with Dudu Myeni, SAA's chairwoman, over plans for a sale and leaseback arrangement via a third party with Airbus to purchase ten A320 aircraft.
After a market meltdown, Zuma abruptly reversed his decision to replace Nene with an unknown former mayor and brought Pravin Gordhan back to the finance post he had held from 2009 to 2014.
Gordhan promptly scrapped Myeni's plan in favour of the one Nene had signed off on, swapping the purchase of ten 320 aircraft for a lease of five A330-300 aircraft from Airbus.
The Treasury said at the time that the lease transaction would improve the airline's financial position and that further measures would be taken this year to stabilise it.