TUESDAY, 11.30AM
SOUTH African Airways, the star Transnet subsidiary up for privatisation, has liabilites totalling R6-billion, and may even be technically insolvent, with liabilities exceeding assets by R600-million, which will get in the way of any potential privatisation of the state airline.
SAA holding company parastatal Transnet has a R17-billion pension fund deficit, which may be taken over by government to ease privatisation. Analysts believe the government will also have to do the same thing with regard to SAA, cleaning up its balance sheet and taking over some of its debt before privatisation.
Public Enterprises Minister Stella Sigcau last week said SAA urgently needs a strategic equity partner, but industry sources say one is unlikely to be forthcoming unless government takes over about R4-billion in long-term liabilities, which would have to be covered by whatever is raised in the sale of the airline. Given that the sale is set to go ahead as the aviation industry hits a worldwide downturn, it is likley to be at fire sale prices.