The embattled South African Broadcasting Corporation (SABC) will receive a multi-billion rand lifeline from government, says communications minister Stella Ndabeni-Abrahams.
In a presentation on Friday (4 October) Ndabeni-Abrahams said that government would immediately transfer R2.1 billion on Monday as part of a short-term turnaround plan.
She said that an additional R1.1 billion will be transferred once the national broadcaster meets a number of preconditions as set by the National Treasury.
The bailout comes after the SABC said that it was technically insolvent and is struggling to honour payments to service providers and contractual obligations.
In September SABC group CFO Yolande van Biljon said that the group’s financial position has worsened and that it ended the previous financial year with a cash balance of only R72 million.
“There are instances where we are unable to honour payments and even (unable) to adhere to committed contracts, which means we often need to renegotiate because we have been unable to meet the requirements.
“Currently, the organisation is technically insolvent. We are also under tremendous strain towards being factually insolvent as a result of our liquidity issues. Cash is depleted and the trade and other payables amount to R1.8 billion as at June 2019.
“There are a number of significant suppliers that make this up, notably Sentech (R554 million), our signal distribution provider; Supersport, Samro and various other content providers (amount to R174 million). We have monthly engagements with all these parties,” she said.