Business rescue practitioners have made it plain that unless the funding is forthcoming, liquidation or a structured winding down are the only options
PUBLIC Enterprises Minister Pravin Gordhan has said in a letter to Parliament’s watchdog committee on public accounts that the government would secure funding for the business rescue of mothballed national carrier South African Airways (SAA) before the month is out.
The undertaking was given in a letter to the chairperson of the standing committee on public accounts (Scopa), Mkhuleko Hlengwa, in which the minister begged off from a meeting scheduled for Tuesday.
“I have accordingly engaged with the SAA business rescue practitioners and we kindly request for postponement of the meeting to another date, preferably, the week commencing October 26,” he wrote.
“This will enable SAA to first focus on securing the requisite funding and the implementation of the adopted business rescue plan and ultimately report back to the committee.”
Two weeks ago, business rescue practitioners Les Matuson and Siviwe Dongwana announced that the airline would suspend all operations immediately while talks with the government continued on funding of R10.4 billion for the airline’s immediate short- and medium-term operations.
The rescue practitioners made it plain in a meeting with affected parties that unless the funding was forthcoming, liquidation or a structured winding down were the only options.
Gordhan has been adamant that the airline must be saved and restructured, contrary to Finance Minister Tito Mboweni who has been open about his reluctance to pour more public money into the loss-making carrier.
The Public Enterprises Ministry has in recent months said it has received unsolicited approaches from potential private partners for SAA. But with nothing coming to fruition, there is no option on the table but further government funding.
It is expected to be announced in Mboweni’s medium-term budget policy statement, which is usually delivered in the third week of October.
It is reliably understood that the funding for SAA would not be flagged as a bailout in budgetary terms but rather as an investment in aviation.
An economic recovery plan that it set to be unveiled in Parliament on Thursday by President Cyril Ramaphosa states that there is no funding available in the financial year for struggling state-owned enterprises, according to a draft tabled to Cabinet last week.
– African News Agency (ANA)