SABC risks factual insolvency by end of March, Parliament hears

Financial data submitted by the SABC to Parliament on Tuesday shows the embattled public broadcaster risks factual insolvency by March 31.

Factual, or technical insolvency occurs when a company’s liabilities exceed its assets.

Parliament’s oversight committee on communications was briefed on Tuesday on progress the SABC has made on its turnaround strategy.

“The severe liquidity challenges we are facing threaten our status as a going concern,” SABC chief executive Madoda Mxakwe told the committee. “Our cashflow is depleted. We cannot honour payments to service providers. We cannot adhere to all our committed contracts.”

Mxakwe said the public broadcaster had seen an improvement in revenue growth on a quarter on quarter basis, and was collecting more from television licences. Cost-cutting measures had saved R785-million in the year-to-date.

However, the broadcaster is still reliant on funding from government.

He said “if nothing is done” the SABC would be factually insolvent, which is why the it is engaging with the department of communications.

The broadcaster’s chief financial officer, Yolande van Biljon, told the committee tha, as of January 2019 actual revenue for the financial year was R5.4-billion, or 12% below the target.

Audience share has been declining since October 2018 and revenue is expected to continue declining in the fourth quarter of the financial year, she said. — Fin24

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Lameez Omarjee
Lameez Omarjee
Parliamentary reporter at Fin24.com

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