Government to back SAA with R10bn
Special appropriations bill to be tabled
THE GOVERNMENT yesterday moved to find funds for cash-strapped national airline SA Airways, with Deputy President Cyril Ramaphosa and National Treasury confirming that a special appropriations bill for R10 billion would be tabled before Parliament to back the transaction.
Ramaphosa told the National Council of Provinces that SAA urgently required the funding. He said SAA was talking to lenders to deal with maturing loans.
National Treasury director-general Dondo Mogajane told the finance committee there would be serious implications if the government failed to recapitalise SAA.
Mogajane said SAA needed a total of R13bn, but the government would be able to inject R10bn.
He said the Treasury was in discussions with Citibank to extend part of its R1.8bn loan following the R2.2bn that was paid to Standard Chartered Bank in June.
“We have acknowledged that SAA’s capital structure needs to be addressed and, without that, SAA will collapse,” Mogajane said.
“We are deciding on the capital injection. There is a proposal of R13bn. It is not R23bn. It is R10bn for 2017/18.”
The moves come as the national carrier scrambles to find money and pay some of its lenders, which want their R6.8bn by the end of the month.
Most of the lenders have refused to extend their loans.
Mogajane said the Treasury was talking to all the lenders for the loans to be rolled over.
He said the other nine lenders were prepared to extend the loans until October, when Finance Minister Malusi Gigaba would table the Medium Term Budget Policy Statement.
He said other lenders were also keen to extend the loans for 18 months, adding that they wanted to know when SAA chairperson Dudu Myeni would be removed from the board.
“We have got a few weeks, and we need money. As we negotiate, some lenders are prepared to extend to October; some are not.
“We are also considering a special appropriation of some kind so that we are able to meet the obligations of SAA, because the implications are higher,” he said.
Mogajane said it would be a serious crisis if SAA defaulted on its loans, and this would cause cross-default in stateowned entities.
He said SAA would need working capital of R2.4bn until the end of its current financial year in March.
Deputy Finance Minister Sifiso Buthelezi said the government was looking at various options to fund SAA, including the sale of its 39-percent stake in Telkom, which, if it went ahead, was expected to generate at least R13bn.
“I think I dealt with this. It was unfortunate that a discussion document was leaked, because it is one of many,” Buthelezi said. “We spoke of the strategic equity partner.”
Buthelezi said the Treasury would report back to Parliament on the sale of the Telkom stake once the decision had been finalised.
“We are aware of public concerns. As far as Telkom is concerned, it’s an important asset to us. However we leverage that asset, we will take into consideration a number of things,” Buthelezi said.