South African airports operator ACSA needs treasury support to finance up to ZAR 11B (US$594M) of new debt by 2025, the state-owned company said on Monday (May 18th).
Since late March when South Africa declared a state of disaster to contain the new coronavirus, major domestic airports such as the continent’s busiest OR Tambo in Johannesburg have closed, knocking revenue at Airports Company SA (ACSA).
African airlines could lose US$6B in passenger revenue in 2020, the International Air Transport Association said last month.
“New debt of ZAR 10B to ZAR 11B 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.
The operator, which also holds concessions at Sao Paulo’s Guarulhos International Airport and Chhatrapati Shivaji International Airport in Mumbai, said about ZAR 3B in guarantees would be required over the next three years.
Between 2021 and 2023 its capital expenditure budget is seen at ZAR 17.9B rand as it develops major projects, such as a new runway and terminal at Cape Town airport, ACSA said.
In March, ratings agency Moody’s downgraded ACSA to Ba1 from Baa3 with a negative outlook as expected passenger traffic was seen falling by at least 30% in the financial year to March 2021.
Struggling state-owned companies including bankrupt national airline SAA and power utility Eskom rely heavily on government bailouts which are straining tight public finances as Africa’s most industrialised economy faces the prospect of a prolonged recession.