19 May South African airports operator underscores need for R$11 billion of new debt finance
Airports Company SA (ACSA) has declared it may need up to R11 billion (US$594 million) of new debt finance from the South African treasury in the wake of the COVID-19 global pandemic.
The airports operator has seen its business grind to a halt since late March when South Africa declared a state of disaster to contain coronavirus. Major domestic airports including OR Tambo in Johannesburg – the continent’s busiest – have been forced to close.
“New debt of R10 billion to R11 billion is required in the next five years and this will require shareholder support in the form of government guarantees,” ACSA said in a presentation to lawmakers.
ACSA, which also holds concessions at Sao Paulo’s Guarulhos International Airport and Chhatrapati Shivaji International Airport in Mumba, added that about R3 billion in guarantees would be required over the next three years.
The company estimates its capital expenditure budget at around R17.9 billion between 2021 and 2023, owing to major development projects such as a new runway and terminal at Cape Town airport.
In March, ratings agency Moody’s downgraded ACSA to a negative outlook in light of a projected 30% fall in passenger traffic in the financial year to March 2021.
African airlines could lose $6 billion in passenger revenue in 2020, the International Air Transport Association said last month.