SABC technically insolvent – CEO
After days of speculation over the future of SABC employees‚ the broadcaster’s CEO has come out to say that the company is technically insolvent.
Speaking at a media briefing Madoda Mxakwe said: “We are technically insolvent as the SABC. We are not able to fulfill our monthly obligations … it’s important to understand as an organisation‚ we are not able to fulfill our financial obligations.”
Had the SABC been a private institution‚ Mxakwe said they would have been recapitalised.
Mxakwe stressed that they were engaging with different stakeholders and trying to extend their borrowing limit.
“I do need to put it on record that the … commercial insolvency is indeed increasing significantly‚” he said.
It was reported earlier this week that the SABC planned to implement a Section 189 process which would result in the retrenchment of close to 1‚000 employees as part of a restructuring effort‚ which it estimated would result in a cost saving of about R400m per annum.
It also planned to halve the number of freelancers it used‚ from 2‚400 to 1‚200.
A notice was issued to all staff on Monday informing them of the public broadcaster’s intention to proceed with a Section 189 process.
“The process was halted following the joint consensusseeking meeting held on October 12 with organised labour. At this meeting it was agreed that the LRA’s Section 189 notice will be put in abeyance until further details as requested by organised labour were made available. The meeting also agreed to the appointment of a Commission for Conciliation‚ Mediation and Arbitration (CCMA) facilitator who will foresee the consultation process‚” the company said.
During Wednesday’s press briefing‚ the company reiterated that employees at all levels would be affected by the restructuring.
Mxakwe said they had tried to get new business and had seen a year-to-year improvement on television licence collections.
“The positive growth trajectory seen in quarter two [of the year] shows that a lot of the plans are beginning to bear fruit‚” he said.
The company’s revenue was said to be at R3.2bn.
Despite massive cost-cutting measures‚ Mxakwe said the total expenditure for the year was at R3.5bn‚ with R463m saved in the past two quarters.
“It shows from cost-cutting measure‚ we are doing what needs to be done‚” he said.