Government still looking for R2bn to save SAA

Flights will remain operational as government struggles to raise business rescue money.
Martin Kingston says the business rescue practitioners have assumed the responsibilities of the board and that he will continue to ‘assist and provide input as required’. Image: Moneyweb

Government has yet to find the remaining R2 billion needed for the South African Airways (SAA) business rescue plan but has reaffirmed its commitment to seeing the business process to its successful conclusion. 

“Following a meeting with the practitioners at the weekend, the Department of Public Enterprises is engaging with the National Treasury to raise funds for the airline in line with the [post-commencement funding] undertaking,” the Public Enterprises Ministry said in a statement on Sunday. 

When SAA took the route of voluntary business rescue in December, Public Enterprises Minister Pravin Gordhan said R4 billion would be needed for the operation, and that half of the amount would be raised from lenders while the other half would be raised in a “fiscally neutral manner”.

Speaking at a breakfast briefing ahead of the annual World Economic Forum on Thursday Finance Minister Tito Mboweni said the government was still working on securing additional funding for SAA. 

Read: What are SAA’s old Airbuses worth?

While it emerged last week that the airline had placed nine of its aircraft, 15 engines and other parts for up sale on January 10, it denied claims that this was in order to raise the R2 billion. Instead, the airline said the sale was to accommodate four new aircraft that have been added to its fleet. 

Nothing but determination

Business Day reported business rescue practitioner Les Matuson as saying that government had until January 19 (Sunday) to release the money or SAA would have to suspend certain flights.

Read: SAA flights at risk without R2bn from govt – union

In response to Moneyweb’s questions, Matuson’s spokesperson Louise Brugman was able to confirm that flights would remain operational. However, she could not provide information on whether the government has been able to find the remaining R2 billion needed for SAA’s business rescue plans.

The ministry said it was “determined” to contribute to the process to reduce job losses, while creating “a sustainable, competitive and efficient airline with a strategic equity partner”. 

“The business rescue process is unprecedented at this level and fashion, and in the public sector,” it said.

“It is a decisive move that demonstrates that government will undertake the necessary bold steps in order to reposition its assets in such a way that they do not continue to depend on the fiscus and thereby burden taxpayers.”

Best option

Martin Kingston, who resigned from the board of SAA on Friday, says business rescue is the best option for the airline.

Kingston, who is executive chair of the board of Rothschild & Co in South Africa, told Moneyweb that SAA needs “drastic changes” to its operations – and not just in terms of its routes, operational structure and management. “It also requires adequate capital, which has been a problem for some time,” he said.

Kingston’s resignation

Kingston also explained his move to step down as director. 

“There is no need for me to be on the board given the appointment of the business rescue practitioners,” he said. 

“They assume the responsibilities of the board and the underlying strategy and business operations.

“We relinquish that responsibility … there’s nothing I can do that I can’t do on the sidelines,” he added, saying that he will continue to assist and provide input as required.

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One must give these government people some credit, they have a wonderful way with words. They can talk the whole day and say nothing meaningful. And the talk is very very impressive.

In reality they need look no further than the Swiss bank account of the Zuma mattress.

… and underneath the couch cushions at Nkandla.

How much more funds must be sunken into SAA? It is clear that this State Owned Entity (SOE) is a lost cause, just ditch it! They don’t have the imagination, creativity, let alone a plan to do anything to be profitable. Any other business doing this would have heard from people voting with their feet – let it die a natural cause before anymore our tax rands are wasted on it. Enough is enough – take it to the knackers already, and send ANC government a ‘thank you for nothing’ card for their years of deplorable deployment of incompetent numskulls who can’t even run a Spaza shop or meaningful Shebeen- to run such a complex business entity.*If by run I meant ‘run it into the ground’, then you can argue they have succeeded.

Government is setting a very bad example for it’s people. In life you are responsible for your actions. No bailouts for poor financial decisions. And that brings us to a definition of a fool. Doing the same thing over and over and expecting a different outcome. Time to close up shop. Father has run out of money.

Not really, I reckon they just don’t care. SAA funded by the taxpayer is essentially bankrupt with deep corruption and incompetence by ANC aligned management and no one is retrenched or fired. Ramaphosa’s farm gets a bit dry and he’s out there firing workers flat out. You draw the conclusions.

While government cant keep bailing out SAA… I think it is becoming clearer this is now a political battle… Treasury just doesn’t want to fund SAA… The government itself is shooting SAA in the foot… This is just plain lies… Why did the government put SAA on business rescue, if it’s going to frustrate that process… It is all political… I have an international flight I needed to book for in March… For the 1st time in years SAA came out as cheapest business class and quickest travel time… But now I have to think… Will it be there in March?… The politics are just nasty

No decent citizen should support this cesspit of corruption in any way. Use any other airline!

Let (Com) Rats invest with their stolen loot? No? Didn’t think so either.

I am sure that if one look under the mattresses of some of these SAA managers one will find R2Bn?

What is the purpose of government? Is it to run local business or govern?? Haven’t enough cronies pillaged this country thoroughly enough??They can’t even govern!! I mean look at the state of the economy, health care, roads, tolls, trains, water. Where’s that proverbial straw and Camel thing??

The straw has been stolen and the camel smoked …. but there may be some Chivas left.

So the Springbok still flies???

Did they steal a little less over the last week or does my 3.00am theory hold water. That is that SAA is just another Eskom, it can work but when they run out of money to steal they bleat for a handout which is easy in SA especially when you are “too big to fail”.

I think now even more that they, like Eskom are blackmailing us.

why do I get the idea government want it to be liquodated

Its like a badly raised, spoilt child, who is now supposed to be an adult, who is so used to getting mom and dads money that they cannot stand on their own. Mom and dad have now just about bankrupted themselves trying to help the spoilt brat. The end is quite predictable…..

“Old Mother Hubbard
Went to the cupboard,
To give the poor dog a bone:
When she came there,
The cupboard was bare,
And so the poor dog had none.

She went to the baker’s
To buy him some bread;
When she came back
The dog was dead!”

Send a demand for the funds to the occupant of Nkandla…..

He’s on sick leave and can’t be found … and even if he could be he can’t remember.

Time for big business to help the country and say they won’t fly / transact with a corrupt entity with no valid financials. They can say they aren’t allowing their staff to fly SAA because of risk of the business failing if it is more politically acceptable to them.

This has already happened on a large scale…

The article headline is more than a little misleading. The R2bn sought urgently by SAA is not going to “save” the airline. Not even R20bn would save it. All it is is a temporary lifeline to let it limp along in business rescue until some sort of permanent solution – either drastic restructuring/ rationalisation or orderly liquidation – can be put in place. This isn’t rehabilitation of the drug addict. This is just giving him his next fix…

The last 25 years have been ONE HUGE PARTY for the ANC, who for the first time, got their hands on the public purse. Obviously it quickly turned into one massive orgy of self-enrichment and irresponsible spending. Hardly a day goes by without a report on corruption by ANC officials who later just disappear into the dark without any form of accountability. Then there are the social welfare projects akin to Scandinavia which is completely out of control and we now have more people on social grants than those actually working. Add to that: free houses, free schooling, free tertiary education, free social grants, free water, free electricity and now proposed free private medical care. But the reality is that according to SARS, only 3 million people pay 97% of the income tax in SA in a country of 56m and another 6m of illegal immigrants. It is evident that the big party is about to an end and the hangover will be a painful throbbing headache with a lot of throwing up and regret about the wild night before.

Debt Rescue = No Interference from anyone. Unless of course the thieves planned this to rescue them from januWORRY blues – 2 Billion is nothing for them, but enough to get them through to month end…

as long as we pay taxes the ANC will have money to steal and to burn by keeping it’s various employment agencies heads above water.the internal ‘struggle’ that is atking place within the ANC is to continue the looting legacy started by the royal shwowerhead who is too sick to testify but for 10 bucks you can take a selfie with him and that chick that destroyed SAA at your nearest branch of capitec…

Let it fail! TAXPAYER’S have already funded this vanity project to the tune of R57 BILLION. Imagine how many schools, universities, colleges, bursaries, hospitals, clinics, police stations, public transport, etc etc this could have funded? We don’t NEED a national airline, there are far more important things that we NEED in this country!

Just think of the lost opportunity: The Eskom bailout monies have been the equivalent of the capital needed to build state-owned Emirates Airlines.

The ANC have turned a thriving airline business into a loss making concern because they used the airline as a feeding trough and gravy train for themselves, their cadre, and their family. The real people that are to blame are those who constantly vote for the ANC despite knowing full well that they have ruined the country and its infrastructure.

End of comments.

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