Chief of SAA in for tor­rid first day

Car­rier seek­ing R13bn loan

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

VUYANI Jarana will be met with a bap­tism of fire on his first day as chief ex­ec­u­tive of be­lea­guered SAA.

The cash-strapped na­tional car­rier is ex­pected to ask leg­is­la­tors to­day for a cap­i­tal in­jec­tion of R13 bil­lion over a pe­riod of three years.

And this as the Na­tional Union of Me­tal­work­ers of South Africa and the SA Cabin Crew As­so­ci­a­tion march to the SAA of­fices to de­mand pay in­creases.

Yes­ter­day’s ap­point­ment of Vo­da­com’s se­nior ex­ec­u­tive, Jarana, marks an end to a twoyear search for a per­ma­nent chief ex­ec­u­tive for the na­tional car­rier.

Per­ilous

Jarana leaves his five-year stint as the chief of­fi­cer of Vo­da­com Busi­ness, to be­come the eighth per­son since 2010 – ei­ther a per­ma­nent or in­terim ba­sis – tasked with turn­ing around the for­tunes of SAA.

Jarana re­places the com­pany’s chief tech­ni­cal of­fi­cer, Musa Zwane, who was act­ing in the po­si­tion since 2015.

The 41-year-old Jarana takes the helm of SAA with a big rep­u­ta­tion in the corporate world, but it re­mains to be seen if he will be able to nav­i­gate the per­ilous po­lit­i­cal land­scape as­so­ci­ated with state-owned en­ter­prises.

To­gether with Vo­da­com’s chief ex­ec­u­tive Shameel Joosub, he was one of the only two Vo­da­com ex­ec­u­tives to be awarded a long-term in­cen­tive bonus in the year ended March, tak­ing his to­tal pay in the pe­riod to R10.7 mil­lion.

Fi­nance Min­is­ter Malusi Gi­gaba yes­ter­day wel­comed the ap­point­ment of Jarana, say­ing at Vo­da­com he had demon­strated that he could build a solid and trans­formed or­gan­i­sa­tion with em­phases on both top line busi­ness growth as well as mar­gin ex­pan­sion.

Cri­sis

“Given that Mr Jarana has turned around a loss-making sub­sidiary of the Vo­da­com Group, Vo­da­com Busi­ness Africa, into a prof­itable and growth busi­ness, we be­lieve he will be key in turn­ing around SAA,” Gi­gaba said. SAA con­firmed in its pre­lim­i­nary re­sults pre­sented to leg­is­la­tors last year that it was in deep fi­nan­cial cri­sis.

The ap­point­ment of a new chief ex­ec­u­tive for SAA was not to­tally un­ex­pected, as Gi­gaba last month said as he un­veiled his 14-point plan to re­vive South Africa’s ail­ing econ­omy said they would fi­nalise the ap­point­ment of a new head at SAA at the next cab­i­net meet­ing. The meet­ing was held this week.

Ian Cruick­shanks, the chief econ­o­mist at the SA In­sti­tute of Race Re­la­tions, said the ap­point­ment of Jarana was a small step in the right di­rec­tion, but his suc­cess at turn­ing around the fi­nan­cial per­for­mance of SAA would be de­ter­mined by whether he was given room to lead the com­pany as he saw fit.

“I hope he gets gov­ern­ment sup­port and there is the in­de­pen­dence of man­age­ment in SAA to im­ple­ment its turn­around strat­egy, and that a fit and proper board chair­per­son is ap­pointed to sup­port Jarana,” Cruick­shanks said.

Strat­egy

The em­bat­tled na­tional car­rier has about R8bn in loans, and its chief fi­nan­cial of­fi­cer Phumeza Nhantsi told Par­lia­ment in June that the group was di­ver­si­fy­ing its debt port­fo­lio and had ap­proached the Pub­lic In­vest­ment Cor­po­ra­tion.

The state-owned com­pany last month re­ceived R2.2bn from the Trea­sury for re­pay­ing its loan to Stan­dard Char­tered Bank.

It also re­ceived a R5bn go­ing con­cern guar­an­tee in Septem­ber last year af­ter a new board was ap­pointed.

The ap­point­ment of Jarana also marks a chance for SAA to start on a clean slate in im­plant­ing its turn­around strat­egy af­ter Gi­gaba last month announced that the na­tional car­rier’s em­bat­tled chair­per­son Dudu Myeni would not serve an­other term when her current term ends at the end of this month.

She is cur­rently fac­ing le­gal ac­tion from Or­gan­i­sa­tion Un­do­ing Tax Abuse and the SAA Pi­lots’ As­so­ci­a­tion, who have asked the high court in Pretoria to de­clare her a delin­quent di­rec­tor, which would bar her from serv­ing as a di­rec­tor, a se­nior ex­ec­u­tive or on any boards for at least seven years.

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