Billions in bailouts to be pumped into ailing SOEs
National Treasury to open its coffers in race to get embattled entities out of financial quagmire
FINANCE Minister Tito Mboweni has pumped billions of rand into struggling state-owned entities (SOEs) in a massive bailout bid to get them out of financial trouble.
This was after Mboweni announced in Parliament yesterday that Eskom would receive R59 billion in two tranches.
The SABC is in line for a bailout of R3.2bn after it requested it more than two years ago.
However, in February, Mboweni had said the public broadcaster needed R6.8bn and the broadcaster said it needed R3.2bn urgently. It has been struggling to pay suppliers millions of rand. Communications Minister Stella Ndabeni-Abrahams told Parliament last week that the SABC would receive R3.2bn in a few days if it met all conditions for the bailout.
State arms manufacturer Denel was also in line for a bailout from National Treasury.
Denel had said it needed R2.8bn to stay afloat and be able to do its business. Denel said a few weeks ago that it had an order book pipeline of R30bn, which could turn its fortunes around.
SA Airways was another in line for a bailout. The carrier needs R5bn for the current financial year.
Mboweni told Parliament yesterday the four entities that got money from the National Treasury would have chief restructuring officers appointed.
Mboweni was expected today to announce chief restructuring officers for Eskom, Denel, SABC and SAA.
He said the adoption of the Appropriations Bill by Parliament would ensure that all the four entities get the money.
“Once this Bill is passed this afternoon (yesterday) we will be in a position to use the contingency reserve account to provide support to the SABC, Denel and SAA,” said Mboweni.
Parliament had passed the Bill but it had lapsed after the elections in May and the new Parliament revived it.
The House also endorsed the Special Appropriations Bill for Eskom with a bailout of R59bn.
Eskom lost its chief executive Phakamani Hadebe, who resigned last month. He is serving his notice.
SAA chief executive Vuyani Jarana also resigned two months ago.
Another senior official at Eskom Andre Pillay also resigned a week ago.
Mboweni said the chief restructuring officers to be appointed in each of the four entities given the bailout would monitor the operations and functions of the companies.
The minister had complained about lack of accountability in SOEs who get bailouts, saying this had to change and the appointment of chief restructuring officers was a starting point.
Eskom is due to announce its results next week and is expected to suffer a financial loss of R20bn. The SABC and other SOEs will release their results in the next few months.