A South African Airways Airbus A320. Picture: SAA
A South African Airways Airbus A320. Picture: SAA

TREASURY is aware Citigroup has cancelled a credit facility for South African Airways (SAA) and is working with the airline to ensure it has enough liquidity to continue operating, Phumza Macanda, the Treasury spokeswoman, said.

Citigroup on December 24 cancelled a R250m short-term banking facility for SAA, leaving the airline without cash, Moneyweb reported, citing an internal document of the national carrier.

The lender would not reinstate the facility without a government guarantee, the website said.

Tlali Tlali, a spokesman for the Johannesburg-based airline, could not immediately comment when called by phone and Ms Macanda was unable to provide more detail.

SAA is in a race against time to receive a government guarantee that will render it a going concern and enable it to table its 2014-15 financial results.

Also, the Treasury is yet to replace SAA’s interim board of three members with a permanent board. SAA has had seven CEOs in the past three years.

Sparks flew recently when board chairwoman Dudu Myeni tried single-handedly to renegotiate SAA’s deal with Airbus that would have saved the airline more than R1.6bn in predelivery payments on aircraft and R1.6bn on its bottom line.

SAA had negotiated with Airbus to lease five new A330 aircraft instead of buying 10 A320 aircraft as part of the original deal to purchase 20 negotiated in 2009.

Ms Myeni wanted to introduce a third party — an aircraft leasing company — into the funding and leasing arrangements.

SAA eventually met its December deadline from Airbus to conclude the deal for a swap of aircraft under the auspices of newly appointed Finance Minister Pravin Gordhan.

Bloomberg, with Andiswa Maqutu