South Africa’s government and trade unions are at loggerheads over unpaid salaries at South African Airways (SAA), which could lead to a messy court battle that may further complicate efforts to rescue the struggling airline, Reuters reported. State-owned SAA has not made a profit in almost a decade and was already under bankruptcy protection when the COVID-19 pandemic struck, exacerbating its woes. It halted all but repatriation and cargo flights in March before suspending all operations in September. Some employees have not been paid since March.

South Africa started a fresh battle with labor groups in its effort to revive the bankrupt state airline, offering three months of wages to employees who haven’t been paid since March, Bloomberg News reported. The government’s Department of Public Enterprises and the National Union of Metalworkers of South Africa agreed to discuss the matter later on Tuesday, according to a spokeswoman for the labor group. Numsa and the South African Cabin Crew Association, another union, had expected members to be paid in full, in line with the country’s legal framework for a business-rescue process.

The South African government has transferred 1.5 billion rand ($98 million) to administrators for national airline South African Airways (SAA) but the funds cannot be used yet, the administrators said on Thursday, Reuters reported. The administrators said the conditions the Department of Public Enterprises (DPE) attached to how the money should be spent were in contravention of labour and companies laws. “We are unable to utilise the funds until the conditions have been amended by the DPE,” they added in a statement. A DPE spokesman said the department would comment later.

South Africa’s National Treasury and the state-owned Land and Agricultural Development Bank are being accused of dragging their heels in negotiating a rescue package for the stricken lender, leaving creditors in the dark as debt repayments loom, Bloomberg News reported. Asset managers and other lenders are yet to receive a response to their queries about financial covenants and the mechanism of a new bond program that will be 60% backed by the government, according to the country’s biggest specialist fixed-income money manager.

A massive increase in projected government debt poses a “major threat” to financial stability in South Africa, the central bank warned on Tuesday, while problem mortgages were also a risk, Reuters reported. South Africa’s government debt is now set to hit 82% of gross domestic product this year as the Treasury grapples with the impact of the COVID-19 pandemic. In its bi-annual review on the soundness of the financial system, the South African Reserve Bank (SARB) said this meant close links between the financial sector and government were now a serious worry.

South Africa could move toward an even deeper junk credit rating this week by losing the only stable outlook on its debt assessments, Bloomberg News reported. Of the 23 respondents in a Bloomberg survey, 12 expect S&P Global Ratings to change its outlook on the country’s credit rating to negative from stable on Friday. That means the next move from the company, which already assesses South Africa’s foreign-currency debt at three levels below investment grade, could be another downgrade. That would take the country to a single B rating and signal an increased probability of a default.

One of the biggest lenders to South African farmers can’t take on new clients or meet half the needs of existing customers until it gets another government bailout to keep operating, Bloomberg News reported. The state-owned Land and Agricultural Development Bank has asked the National Treasury for 7 billion rand ($455 million) to ease its cash woes and reduce debt. The Pretoria-based institution resumed interest payments on its borrowings in August after getting 3 billion rand from the government, but isn’t yet able to meet capital repayments.

South Africa’s insolvent national arms company is seeking to fire 13% of its workers in a bid to survive after the government spurned its plea for a bailout, Bloomberg News reported. Denel SOC Ltd., whose predecessor was established to bypass sanctions against the apartheid regime, has told 379 workers in its artillery, ammunition and armored-car divisions that they could lose their jobs, according to Helgard Cronje, a representative of labor union Solidarity. The so-called section 189 notice sent to the employees is a legal step needed before cuts can take place.

Money owed to aircraft lessors and some creditors of South African Airways is not covered by a 10.5 billion rand ($665 million) government bailout, SAA’s administrators said, Reuters reported. South Africa’s government allocated the latest cash injection for SAA in last month’s mid-term budget, but says it will not put further money into the airline. SAA’s administrators told Reuters on Thursday that 1.7 billion rand owed to lessors and 600 million rand which it owes to creditors from before the airline went into administration nearly a year ago would not be covered.

When South African president Cyril Ramaphosa recently extolled in parliament his government’s provision of R500bn ($31bn) to steer the nation’s battered economy through the pandemic, there was some awkward fine print for the country’s banks, the Financial Times reported.