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24 Nov 2009 16:59
The South African Broadcasting Corporation (SABC) will receive a bailout of more than R1-billion, Communications Minister Siphiwe Nyanda said on Tuesday.
“We hope that the financial injection by government will help the SABC meet its urgent needs, such as payment of outstanding debts and other matters of priority,” Nyanda said in a statement.
Finance Minister Pravin Gordhan approved the cash-strapped public broadcaster’s application for a government guarantee of R1,47-billion.
According to the Treasury, a “draw-down” of R1-billion would be made available immediately.
“Through newly introduced tight control measures that include regular management reports, the shareholder will ensure that the money given to the public broadcaster is utilised properly and to settle urgent outstanding financial obligations,” the statement read.
The remaining R473-million would be subject to the broadcaster presenting a plan with clear revenue targets and cost-cutting measures, to enable effective oversight and monitoring.
Nyanda thanked Gordhan and the SABC board for their work.
“The SABC is a national asset that needs to be guarded with jealousy by those put in charge of looking after it on behalf of all South Africans.”
Earlier this month, Parliament’s communications portfolio committee was told by the SABC interim board that the ailing broadcaster would begin turning a profit by 2012. The broadcaster planned to repay all its debts by the end of the 2014 financial year.
It was granted R200-million by the Treasury in October.
The SABC would get this between November and March next year and pay for commissioned local content.
Its application for the five-year government guarantee of R1,4-billion would “allow the corporation to borrow money from institutions”.
The committee heard that the corporation’s losses stood at R910-million, but this figure was expected to start dropping.
The SABC had also run an overdraft of between R580-million and R600-million since March, the start of the current financial year.
Cost-cutting measures and a turnaround strategy implemented by the interim board in the past four-and-a-half months had saved the corporation about R65-million.—Sapa
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