South Africa: SA Express Might Struggle to Pay Salaries After February As Funding Is Held Up

analysis

SA Express business rescue practitioners have been asking the Department of Public Enterprises for funds to pay salaries beyond February 2020 as the airline is bankrupt. Tito Mboweni allocated R200-million to the airline for 2020/21 in his Budget - money that is yet to be transferred into the airline's bank account.

SA Express, the struggling state-owned airline that is in the throes of business rescue, is in a dire financial position as efforts by the rescue practitioners to seek funding from the Department of Public Enterprises to pay employee salaries have stalled.

Without the urgent funding from the department, which oversees the operations of SA Express, the state-owned airline might struggle to pay salaries beyond February 2020 to its about 1,000 employees and business rescue proceedings might be hobbled.

While it is unclear how much funding SA Express requires from the department for business rescue proceedings, the airline previously said it required a R164-million government bailout for the 2020/21 financial year to remain operational.

In his budget speech on 26 February 2020, Finance Minister Tito Mboweni allocated SA Express R200-million for 2020/21 - money that is yet to be transferred into the airline's bank account. However, Mboweni said the government...

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