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Ramaphosa ready for tough choices on ailing SOEs

Saving state-owned companies will ‘take extraordinary effort, and in some cases, tough decisions.’

President Cyril Ramaphosa said he is ready to make tough decisions over the future of South Africa’s struggling state-owned companies after placing the national airline into a local form of bankruptcy protection last week.

“Business rescue is not the preferred option for fixing our state-owned enterprises, nor would it be necessarily advisable in other circumstances,” Ramaphosa wrote in his weekly open letter to the country. “But the resolve we have shown in putting South African Airways into business rescue cuts across all key state-owned enterprises. We are taking all necessary measure to turn them around.”

The main task facing the government is to reduce the financial dependence the companies have on the state, and as a result, any further financial support will come with “strict conditions” designed to promote sustainability and self-sufficiency, Ramaphosa said. 

Read: Bye bye SAA

“We are clear that the state will retain ownership of all those state-owned entities that are strategic,” the president said. Where necessary, South Africa will seek strategic equity partners to help raise capital, source skills and technology, and improve efficiency, he said.

SAA has posted losses since 2012 as it grappled with the high operating costs of an aging, inefficient jet fleet and a bloated workforce, on top of high taxes, political interference and corruption scandals. State-owned power utility Eskom has to rely on state bailouts to continue operating, while the government-controlled national broadcaster is also among firms battling to survive.

“Despite the depth of the current challenges, none of our state-owned entities is lost. They can be saved,” Ramaphosa said. “But it will take extraordinary effort, and in some cases, tough decisions.”

© 2019 Bloomberg 

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If you got rid of it 10 years ago we would not have been in this position.

Not so clever after all.

Who was the president 10 years ago ?

Obviously he isn’t in a position where he can just freely do what he wants.

But he is trying the right things on the SOEs – whether it will work, is another question.

During the “lost” Zuma years the SOE’s was directly under the Vise President a certain Mr. Ramaphosa.

CR perpetually shocked. Anc’s favorite euphemism “challenges”. Do they not feel any shame in being the laughing stock of the world? They have done everything possible to prove the naysayers correct.

I like that – IT – if he’d not stood by while IT sold SA into slavery and almost to the russians while he was at it – we’d be a lot better off. We and the World need more leaders and LESS politicians.

“President Cyril Ramaphosa said he is ready to make tough decisions over the future of South Africa’s struggling state-owned companies”

HA,HA,HA. Cyril has been president for how long now??? Now only he is “prepared” to make tough decisions.

Another useless politician.

hahaha Mr P.What a joker. Yes -tough decisions like throwing another R4billion down the SAA bottomless pit.Despite the tough talking.

Yeah tough choices like should we pay a double or triple bonus at Eskom and allow ANC chums to tender at 100% or 200% mark up.

Off course Eskom and the other SOE’s can be saved. Just use taxpayers money to bail them out, as usual.

This is very disturbing. Tourists arrive here-cannot use electricity -and tell the world that SAis broken. They see SAA -mortally wounded. And they hear about crime, unemployment , NHI and EWC.

Put this all in a pot and the impression that one gains is not favourable-far from it-yest the brilliant business builder( what business??) Ramaphosa promises more and delivers less.

Strange that Moodys views our debt as investment case given the GDP growth, SOE failures and electricity issues. Very strange!

“Strange that Moody’s views our debt as investment case given the GDP growth, SOE failures and electricity issues. Very strange!”

I second that opinion.

Only an idiot would rate South Africa as “investment grade” in the current configuration. But as always there is always a hidden agenda, or some kind of benefit to be had somehow. Would be nice to “own” a ratings agency and know when / if someone would or would not be downgraded / upgraded. A bit of a conflict of interest in my opinion on certain money managers?

Top Holders and Investors of Moody’s Stock

Fund or Company Name Number of Shares Valued At As Of
Berkshire Hathaway 24.67M $5.05B Sep 2019
Vanguard 12.48M $2.56B Sep 2019
BlackRock 10.38M $2.13B Sep 2019

Saving state-owned companies will ‘take extraordinary effort, and in some cases, tough decisions.’ – your failure is already implicit in this statement, the only ‘money’ you make comes out of my pocket, and unlike yours, it isn’t bottomless. you stood by while Zum dug the hole SA is in – YOU CAN STOP TALKING AND START DOING.

Damned fool, you can’t even fund the interest on all your wmc loans….next stop junk grade and the IMF showing you anc incompetents how they can run our country without you!

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