Embattled SAA is set to receive balance of R10bn funding

Last year Minister of Finance Tito Mboweni announced that a R10.5-billion bailout would be allocated to bankrupt SAA. On Wednesday, the department of public enterprises department announced that the balance of this funding is due to be paid to SAA soon.

The director-general of the department of public enterprises, Kgathatso Tlhakudi, said the adjustment of appropriation act was passed in January, and now the balance can be transferred to SAA. 

“We are also expecting the business rescue practitioners to be exiting the business sometime this month. Every opportunity will be taken to save as much cash as possible,” he told parliament’s portfolio committee on public enterprises on Wednesday.

Tlhakudi told the committee that the Covid-19 pandemic has affected the entire aviation industry harshly and that the new variant of the virus in South Africa has had undesirable consequences on traffic flows.

Deferred salaries to be paid

Last week, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) announced their intention to approach the labour court over unpaid salaries of their SAA members. 

Tlhakudi told the committee that three months of salary arrears, worth a total of R600-million, are still to be paid to workers, but this might not be affordable because of limited funding, and might put the business rescue at risk.

Committee member MP Judith Tshabalala said workers should be paid their outstanding money.

 “We don’t want a situation where Numsa  will be running to the media and sitting on our neck. They love the media. We must ensure for real that the arrears in salaries are paid on the promised dates,” she said.

According to Tlhakudi, the outstanding salaries will all be paid by 19 February.

He added that the state had made a social plan and financial commitment to upskill and educate affected workers. Bursaries will be set up for those interested in certificated programmes and short courses.

“We have engaged with the department of labour, [the] department of education and other stakeholders to ensure affected workers can reapply for work or start their own businesses afterwards,” Tlhakudi told the committee.

Minister of Public Enterprises Pravin Gordhan told the committee that the current board at SAA would remain in place for the next few months. 

“As long as SAA is still under business rescue, the board doesn’t have any say on the institution. SAA facilities will be utilised for the transportation of the vaccine from around the world, as well as around the country,” Gordhan said.

“We did as much as we could to ensure that affected employees were able to provide for their families during December. The unions were not very helpful in that process as they kept delaying the process.

“I have given instructions that as much money [as possible] must be saved by SAA. We will continue to do the best we can for the sake of the country and SAA, on the other hand,” Gordhan  said.

SA Express liquidation

During the briefing, it was also announced that a buyer had been identified for SA Express. The airline was placed under provisional liquidation last year after its business-rescue process failed.

The purchase price was R50-million payable as a bank guarantee, which would be offset by the sale of assets and the balance being payable and recovered from the bank guarantee. 

“A bank guarantee is yet to be concluded, and the sale of shares agreement has not been finalised,” Tlhakudi said.

He added that most of those involved in the purchasing of SA Express are former employees. The total transaction will be concluded in the next three months.

More than 691 employees will be affected by SA Express’s liquidation, and their contracts have been suspended since April 2020. 

“The employees have approached the South African Human Rights Commission for mediation. The department is still awaiting the conclusion of this process,” Tlhakudi said.

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Chris Gilili
Chris Gilili is a climate and environmental journalist at the Mail & Guardian’s environmental unit, covering socioeconomic issues and general news. Previously, he was a fellow at amaBhungane, the centre for investigative journalism.

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