CAPE TOWN– Deputy Minister of Finance Mondli Gungubele has told Parliament here that it will cost approximately 60 billion Rand (about 4.82 billion US dollars) to privatise cash-strapped South African Airways (SAA).
Briefing Parliament’s Standing Committee on Appropriation Wednesday on the progress made by SAA following its 10 billion Rand recapitalization by the National Treasury late last year, Gungubele said SAA’s turnaround strategy was being received positively by lenders and other stakeholders in the aviation industry.
However, he added, the airline will still need a further capital injection in order to break-even as SAA is is far from recovery. It has 9.2 billion Rand in loans which are about to come due and liabilities amounting to almost 18 billion Rand, he said.
The airline will require a further 12 billion Rand between now and March next year.
Gungubele said the government takes responsibility for SAA sinking into debt. Our calculations are that the implications are not less than 60 billion Rand compared with what we are raising now but we accept that we have to take accountability to Parliament in as far as this (is concerned), he said.
The entity has got serious financial challenges. It’s got serious corporate governance challenges … If you offer the medicine, the medicine is for a purpose.
Source: NAM NEWS NETWORK