Following confirmation from National Treasury that selling government’s stake in Telkom to raise R10 billion to bail out SAA is on the cards, internal memos and documents have leaked showing deeper troubles at the airline.<\/p>\n
On Thursday, a Treasury spokesperson confirmed to media that selling government’s stake in Telkom – worth over R14 billion – was an option being considered to raise funds to pay off SAA’s debts.<\/p>\n
While the option was being discussed, nothing has been finalised, the spokesperson said.<\/p>\n
The response from Treasury was forced \u00a0following comments from the DA’s Alf Lees, who told Parliament this week that Treasury was looking to do the deal.<\/p>\n
Government holds a stake of about 39% in Telkom, while government pension fund the Public Investment Corporation holds another 11.4%.<\/p>\n
Finance minister Malusi Gigaba previously stated that he would disclose a preferable financing option for SAA at the medium-term budget statement in October, and suggested that non-core state assets could be sold off, to avoid putting additional strain on the budget.<\/p>\n
No consultation<\/strong><\/p>\n According to the Huffington Post SA<\/a><\/strong>, internal documents from National Treasury show that Gigaba is trying to pursue the fund-raising for SAA without any consultation – saying that it is an emergency situation.<\/p>\n The leaked documents reportedly show that Gigaba’s plan to give SAA a R7.8 billion bailout (R10 billion, including last month’s R2.2 billion bailout) was not finalised in consultation with the economic, employment and infrastructure directors-general.<\/p>\n The urgency was due to the fact that SAA needs to pay a government-guaranteed debt payment of R6.79 billion by the end of September – failing which, a further\u00a0R7.8 billion in government guaranteed debt will need to be paid because of cross-default clauses.<\/p>\n The government’s debt exposure to SAA is almost R20 billion.<\/p>\n