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Three South African Airways (SAA) aircraft stationed among other airlines at OR Tambo, Johannesburg International Airport, South Africa, on July 5, 2013. EPA / UDO WEITZ
Official talks are underway to provide the SAA in financial difficulty another 9.2 billion rubles by March 2019, said Tuesday the committee of public enterprises of Parliament. Such a financial parachute would come four months after the rescue plan of 5 billion rand that the National Assembly should approve Wednesday as a special credit. SAA told MPs that it actually needed 21.7 billion rand to stay in the air. And this should come from the government, according to its approved business plan, "Shareholder to Recapitalize SAA".
Public Enterprises Minister Pravin Gordhan told MPs on Tuesday that Finance Minister and Finance Minister Tito Mboweni were discussing the repayment of 9.2 billion rand of SAA debt that will expire in March. 2019.
"That (9.2 billion rand) is part of the discussions with the Minister of Finance … We will contact you. "
But finding a strategic partner for SAA, as the government has been saying for two years to help ease the burden that the national airline has imposed on a national portfolio already in high demand, now seems out of place. This is at least until the national airline is in a better financial position, thanks largely to the government's bailouts.
"Improve the state of the SAA (if not), no one will say that I am interested in an investment in SAA, "Gordhan said.
A strategic partner was envisaged to avoid what would be an even more bitter pill: the sale of shares of the Telkom government worth 10 billion rand. This possibility was raised in a leaked memo entitled "2017 N17 Cabinet Note" and discussed in August 2017. The sale of SAA, as Mboweni suggested shortly after being sworn in as Finance Minister, was dismissed.
On Tuesday, it appeared that SAA had contracted short-term bonds worth 5 billion rand expiring in November 2018. This seems to be related to the terms of the loan renegotiated in 2017 by the Finance Minister, Malusi Gigaba, who also has twice in 2017. used the emergency arrangement of the PFMA under section 16 to provide SAA with a bailout of 2.2 billion rupees to repay a Standard Chartered loan 3 billion in September 2017 to repay a loan of CitiBank of 1.8 billion and provide working capital of 1.2 billion rand.
In addition to the 5 billion rand due by SAA over the next three days, it will need 9.2 billion rand to repay short-term debt maturing in March 2019, while SAA also said it needs to R $ 3.5 billion in working capital in December. 2018 and R4 billion from March 2019.
The troubled national airline does not have these rights and cents required. In fact, it will probably take more than billions of dollars to cover losses of R7 billion over the next two years, with losses of R5.2 billion expected for the current 2018/19 and another 1.9 billion rand deficit for the current year. Exercise 2019/20.
Options are limited. Gordhan says:
"Banks are not as friendly as before. They do not only want the guarantees of the government, but also the skills to implement the plan and the political will … "
And two aviation fuel providers have reduced PAC payment times from 21 to 7 days, breeding exposure, according to his presentation to MPS, while also stating that "suppliers and partners require an upfront payment".
SAA holds the government to pay billions of dollars bailout from a very tight national stock exchange. Nobody said that like that, everyone is too polite, but if the Association does not get bailouts, repayment of their loans can not be reimbursed. Such a default triggers not only the immediate payment of SAA's existing debt of 19.1 billion rand, but also a complex call for cross-debt that would have an impact on all expenses and would also affect, for example , the R350 of Eskom. -d billion of debt guaranteed by the government. This kind of money is not available, finished and Klaar.
It appears that SAA's board of directors and current leaders have managed to stabilize governance turmoil, even though the financial turmoil is continuing and should increase once the 2016/17 Annual Report is completed. and the audited financial statements will finally be published.
The key management positions of SAA have been filled. According to the statement prepared to deputies, an inventory inventory is completed (apparently for the first time in a long time). And while the deadline to complete the badet register has been extended from one year to June 2019, "a service provider has been designated to count and mark all badets, record them in a registry and evaluate the duration remaining useful life ".
The roads were redeveloped or boxed as one of the flights to London, leaving the remaining flight to Heathrow that makes a profit. The order lines have been explored in order to generate a human resource savings of 400 million rand, and a savings of nearly 500 million rand in the area of purchasing.
On the back of four forensic reports, at least five employees were fired, 21 received a final written warning and two employees resigned. SAA President Vuyani Jarana told MPs that it was important to resolve human resource issues before launching civil suits to recover lost money or to lay criminal charges.
But the problem remains: because of the financial turmoil, SAA is not a functioning company – it is effectively bankrupt – and the only reason the national airline was not founded is the guarantees of the airline. State.
And this has been the case for over a year. In August 2017, a member of the SAA's Audit and Risk Management Board, Akhter Moosa told the watchdog public spending of Parliament, the National Public Accounts Committee (Scopa), the national airline, had a negative net worth of 12.2 billion rubles in March 2017.
"So, he (ASA) has no funds to operate. It is therefore necessary that the shareholder (the government) supports. "
Gordhan told MPs Tuesday that SAA was "a victim of corruption", in line with the more general phenomenon of state capture that has also affected other institutions and state-owned enterprises, such as Eskom and Transnet.
With a flexible minister, a board of directors and senior executives, procurement has become the center of facilitated capture. And in this process, the main activities are affected and the revenues are negatively affected. For example, at SAA Technical, the Maintenance wing, this meant inflation between 30% and 40% due to intermediaries in the total expenditure of 3.4 billion rand.
And the minister paid tribute to SAA's board of directors and its leaders for cleaning up.
"Talking about numbers is easy, but on the ground, it takes a lot of courage to stop what is happening. "
Gordhan, who badociated the phrase "connect the dots" with state capture networks, was found to be targeted in an EFF campaign that took him into account. Called "dog of white monopoly capital" at the demonstration of the FEP before the Zondo inquiry commission on the state. Capture while Gordhan testified. And on Tuesday, EFF leader Julius Malema brought charges of fraud and corruption against Gordhan, including for having a bank account in Canada, although this allegation was dismissed by Gordhan while he was not allowed to do so. he was under oath to the Zondo commission.
The Ministry of Public Enterprises rejected this latest EFF decision a day after Gordhan contacted the Equality Tribunal and filed charges of "crimen injuria".
"Their so-called (the FEP) Billing form is unfounded, containing a set of lies, false news and fabrications. This is simply their latest attack on ongoing efforts to fight corruption and theft in state-owned enterprises and other public institutions. "
All that that can mean for SAA, which is part of Gordhan's political portfolio, just like Eskom, Transnet and Denel, three SoEs that found themselves at the heart of the state capture, remains to be seen. But what has become clear is that the national airline, although it insists that it will need no less than 21.7 billion rubles to stay in the air, is doing good things to demand progress.
Whether it's last week's meeting with MPs on the credit committee or Tuesday's interaction with the public enterprise committee, SAA's positive speech is "Flying out of the storm".
The only problem? As MP Alf Lees has identified, confirmed by an independent aviation expert Daily Maverick The cover page of the "Out of the Storm" presentation describes a plane taking off in storms and lightning storms – rather than emerging from turbulence. DM
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