Government would consider an independent SAA board with a shareholder structure similar to that of the country’s partly state-owned telecom firm Telkom, according to Public Enterprises Minister Pravin Gordhan.
He told broadcaster eNCA on Sunday that Telkom was an interesting model that could be considered to find a solution for SAA. However, he remained non-committal as to where the required funds would come from. “Where it comes from, the form it comes, is something that is still being worked on. As we make progress, we will keep the public and Parliament informed,” he said.
Government owns 40.5% of Telkom, and state-owned fund manager Public Investment Group 12.4%, with the rest owned by institutional investors and the public.
Gordhan’s comments followed a tweet by Finance Minister Tito Mboweni on Saturday in which he denied planning a bailout of SAA. He was responding to an urgent application by opposition party Democratic Alliance (DA), in the Pretoria High Court, in which it seeks to interdict him from using “emergency powers” granted by the Public Finance Management Act to disburse funds from the fiscus to SAA. “This bailout thing you talk about does not exist. It only exists in your mind. Where is the evidence for this allegation. I do not know about this,” Mboweni tweeted.
Last week, a letter committing Government to support rescuing SAA, signed by Gordhan and Mboweni, was delivered to the airline’s business rescue practitioners in line with conditions precedent for the plan to succeed. In this, the Government committed itself to “mobilising funding for the short-, medium- and long-term requirements to create a viable and sustainable new SA national airline”. Whether this means “providing” funding has not been clarified. No one has explained where these extra billions will come from. The DPE’s claims that potential equity investors are lining up, remain unproven.
The letter – slammed by opposition parties DA, IFP, UDM and the Free Market Foundation – comes as Treasury is trying to stabilise Government finance and cut spending to slow South Africa’s debt burden. Mboweni’s consistent stance to date has been that there is no money to rescue SAA. Treasury is already committed to repaying SAA loans to banks totaling R16.4bn (€857.4m) over the next three years. To restart SAA, it will have to find another R10.1bn (€528m) over the same period, including R2.8bn (€146m) in immediate start-up costs for July and August.
Meanwhile, all conditions precedent for SAA’s business rescue plan have to be met by Wednesday (July 22) for the plan to succeed, the BRPs confirmed. They are to publish a report – confirming whether or not this has been achieved – to all affected parties on Thursday (July 23), according to their spokesperson, Louise Brugman.
Should these conditions not be met by Wednesday (July 22), creditors will meet again on July 24 to reconsider the plan, failing which the BRPs will discharge the business rescue. However, should they be met, the plan will be deemed “substantially implemented”. The BRPs would then set up a receivership to deal with creditors’ claims; and a new SAA interim board and acting CEO, Philip Saunders, would take over, the BRPs said.
The full list of conditions can be found here: www.matusonassociates.co.za/saa/conditions
