Ramaphosa: Selling SAA could collapse state coffers

South African Airways (SAA) is so debt-laden that selling it now would make its debt payable immediately and possibly collapse the fiscus, President Cyril Ramaphosa said on Tuesday.

Ramaphosa was responding to questions in Parliament. 

Democratic Alliance leader Mmusi Maimane had asked the president’s position on the troubled airline, as it appeared that Finance Minister Tito Mboweni and Public Enterprise Minister Pravin Gordhan had different view points on SAA’s future.

Mboweni has been vocal about privatising state-owned enterprises and during his mini-budget said there are “no holy cows”, while Gordhan has tasked SAA’s board notice to stabilise the airline’s finances among other things.

Ramaphosa said he knows that Maimane’s stance is to close down the airline, but that course of action is problematic. “Here is the reality — SAA is laden with debt right now, as we speak, it is laden with debt for a whole number of reasons …If you were to say today sell SAA, we would not be able to get any value for it,” he explained.

The debt SAA carries is significant and underwritten by government.

“If we shut it down it means the debt of SAA becomes payable immediately. Immediate payment of that debt has an impact on debt carried by all other state-owned enterprises and that can collapse the fiscus.”

The future of the airline is linked to how it is stabilised, the president said. One way to do that is to get a strategic equity partner to help take the airline forward.

Rather than shutting down the airline, Ramaphosa said it is important to first stabilise the airline.

Treasury has allocated R5-billion to SAA to stabilise its debt, R14.2-billion of the airline’s debt falls due in March 2019. — Fin24


These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Lameez Omarjee
Lameez Omarjee
Parliamentary reporter at Fin24.com
Advertising

Judge trashes entire lockdown regime as constitutionally flawed

The high court ruling will delight gatvol South Africans but is unlikely to stand the test of time

Eusebius McKaiser: Two important lessons to learn about racists

The racially intolerant act to keep black people in “their place”, some even while claiming they're allies
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday