{"id":279603,"date":"2018-10-24T14:30:02","date_gmt":"2018-10-24T12:30:02","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=279603"},"modified":"2018-10-24T14:36:34","modified_gmt":"2018-10-24T12:36:34","slug":"saa-to-get-r5-billion-bailout","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/279603\/saa-to-get-r5-billion-bailout\/","title":{"rendered":"SAA to get R5 billion bailout"},"content":{"rendered":"<p>The National Treasury\u00a0has confirmed that South African Airways, SA Express, and the South African Post Office will receive further financial support, in its medium-term budget policy\u00a0<a href=\"http:\/\/www.treasury.gov.za\/documents\/mtbps\/2018\/mtbps\/FullMTBPS.pdf\" target=\"_blank\" rel=\"noopener\"><b>statement<\/b><\/a>.<\/p>\n<p>SAA will receive R5 billion through a special appropriation bill to settle debt redeeming between now and March 2019.<\/p>\n<p>This will help prevent a call on the airline\u2019s outstanding debt of R16.4 billion, which is guaranteed by government, Treasury said.<\/p>\n<p>In addition, R1.2 billion has been allocated to South African Express Airways, while the South African Post Office will recieve R2.9 billion to reduce debt levels.<\/p>\n<p>&#8220;It is expected that new boards at state-owned companies will ensure higher standards of governance and more effective use of public money,&#8221; Treasury said.<\/p>\n<p>Other in-year allocations include:<\/p>\n<ul>\n<li>R800 million added to the school infrastructure backlogs grant to complete approved projects.<\/li>\n<li>R166 million added to the national health insurance (NHI) indirect grant (health facility revitalisation) component to procure medical equipment and to design a new academic hospital in Limpopo.<\/li>\n<li>R546 million reprioritised within the NHI indirect grant to address the critical shortage of medical professionals in the health sector, and to procure beds and linen for health facilities.<\/li>\n<\/ul>\n<div class=\"article\">\n<div class=\"article-content\">\n<p>These allocations will be paid from a contingency reserve and unspent funds from other government departments, Treasury said.<\/p>\n<\/div>\n<\/div>\n<div class=\"footer-metadata\">\n<div class=\"author_contact field\"><strong>SAA not making cash<\/strong><\/div>\n<\/div>\n<p>In a separate\u00a0section focusing on the risks associated with South Africa&#8217;s state-owned enterprises, Treasury said that SAA has a R19.1 billion government guarantee &#8211; R14.5 billion of which has been used.<\/p>\n<p>SAA has R14.2 billion of repayments due by March.<\/p>\n<p>&#8220;In 2018\/19, government is allocating R5 billion to help the airline repay this debt,&#8221; it said.<\/p>\n<p>&#8220;In general, SAA is not generating sufficient cash to repay its total debt and will have to negotiate with lenders to refinance or extend maturity dates.&#8221;<\/p>\n<p><strong>Battling state-owned enterprises<\/strong><\/p>\n<p>The national carrier is one of several state-owned companies that will struggle to refinance or redeem debt without government assistance at a time when access to credit is becoming more difficult due to weak balance sheets, poor governance and liquidity challenges, the Treasury said.<\/p>\n<p>Contingent liabilities due to government guarantees for debt of state companies is a major risk to the fiscal path, it said.<\/p>\n<p>According to a report by <strong><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2018-10-24\/s-african-airways-gets-5-billion-rand-told-to-restructure-debt\" target=\"_blank\" rel=\"noopener\">Bloomberg<\/a><\/strong>, state-owned firms have a combined debt load of R1.6 trillion, of which R670 billion is guaranteed by the government, according to the budget review.<\/p>\n<p>Debt redemptions by the 10 biggest borrowers will average R66 billion annually in the next two fiscal years, more than government repayments due over the same period.<\/p>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/business\/279595\/sa-budget-deficit-widens-on-tax-revenue-shortfalls\/\" target=\"_blank\" rel=\"noopener\">SA budget deficit widens on tax revenue shortfalls<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The National Treasury\u00a0has confirmed that South African Airways, SA Express, and the South African Post Office will receive further financial support in its medium-term budget.<\/p>\n","protected":false},"author":10,"featured_media":137355,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[26],"class_list":["post-279603","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/279603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=279603"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/279603\/revisions"}],"predecessor-version":[{"id":279641,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/279603\/revisions\/279641"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/137355"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=279603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=279603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=279603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}