Gordhan: "SAA will be able to pay debt"
The finance ministry on Wednesday said it had taken steps to ensure that loss-making South African Airways would have the cash to honour its debts when payment becomes due.
These steps included repatriating funds from overseas and efforts to secure further short-term bridging facilities on the back of unused government guarantees to the tune of R2 billion, National Treasury said.
“Of the R14.4 billion in guarantees extended to SAA, the airline has R2 billion it has not utilised, which can be tapped for additional financing,” it said.
“National Treasury has been in contact with several of the lenders currently providing SAA with unguaranteed short-term facilities and indications are that the banks are not intending to withdraw their facilities at this time. Regular engagements with lenders have been taking place since 2014 and will continue until the airline is stabilised.”
Treasury added that the national carrier submitted a request for going concern status last month.
“SAA submitted its request for a going concern guarantee during December 2015. National Treasury is currently considering this request. The approval of the guarantee is essential for finalising SAA’s financial statements on a going concern basis.”
It said Finance Minister Pravin Gordhan was overseeing efforts to ensure the airline was stabilised and that its governance woes were resolved.
This meant appointing a full board and speeding up the process of appointing a permanent chief executive officer “as these are essential for stabilising the airline”.
The term of the current board, including that of controversial chairwoman Dudu Myeni, will, according to Treasury sources, expire when Gordhan appoints a new board.
“It does not mean that Ms Myeni will not be part of that board. She may or may not be re-appointed,” Treasury spokeswoman Phumza Macanda told ANA.
Myeni made headlines last year with attempts to renegotiate a lease agreement, reworked from an initial sale contract, with European aircraft manufacturer Airbus. Treasury sternly warned that this may lead to penalties for the cash-strapped airline, and that the country could not afford it. In December Gordhan put his foot down and told her to stick to the original deal agreed to in mid-year. This prompted commentators to speculate that Myeni’s days as chair were numbered.
In the meanwhile, the Hawks on Wednesday issued a statement denying reports that they were investigating Myeni as part of a probe into wrongdoing at the airline, including tender fraud, irregular route closures and, the elite unit said, sabotage which could be jeopardising safety. The head of the unit said not only was Myeni not a subject of investigation but she had in fact been facilitating it.
Treasury declined to comment on the contents of the Hawks statement.
Expanding on the State’s future plans for SAA, Gordhan added: “The goal in the longer term is to ensure that the airline is able to operate without support from the state, as should be the case with all state-owned entities.”
He added that SAA “is open for business and will remain so”.
Photo: Gallo Images