Treasury willing to sell part of SAA to private partner: report
South African Airways requires a R5 billion cash injection in the current financial year to help it meet its financial obligations.
This is according to National Treasury director-general Dondo Mogajane, who has told parliament the cash injection could not come from government as it has already pumped R20 billion rand into the state-owned enterprise, reports Reuters.
Instead, other avenues are being considered to help cover the shortfall, with Mogajane saying that the National Treasury was willing to consider selling a stake in the airliner to a private equity partner.
The consideration follows confirmation by deputy minister of finance, Mondli Gungubele, that the airline will require an additional R12 billion in bailouts over the next three years.
Speaking to parliament in April, Gungubele said that SAA would need another government bailout in the 2018/19 financial year of R5 billion – with another R5 billion needed in 2019/2020, and another R2 billion needed in 2020/21.
This would allow the airline to continue operations, and also to help service its debt – which matures in March 2019.
Bloomberg reports that CEO Vuyani Jarana is at the early stage of a turnaround plan designed to return the carrier to break-even by 2020 and ease dependency on the government, which last year approved a bailout to swerve a default on debt owed to Citigroup Inc.
The airline has shaken up the board and cut routes to reduce costs but is yet to emerge from any financial distress.
Read: ‘SAA is beyond repair’
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