As time runs out for SAA to raise R6.9bn (€431m) by Saturday (September 30), the Democratic Alliance is calling for Finance Minister Malusi Gigaba to, among other things, place the national carrier under business rescue and sell it off.
Speaking at a media briefing on Thursday, September 28, DA leader, Mmusi Maimane, said the R10bn (€625m) National Treasury was trying to source for the airline was only a short-term solution.
“The R10bn government says SAA needs will only pay off the bank loans of R6,9bn by September 30, the Standard Charted bail out of R2.2bn (€137m) at the end of June 2017 and R750m (€47m) to pay suppliers who were not fully paid in July and August 2017. It will not provide working capital to fund the losses that National Treasury and the latest turnaround plan indicate will continue for the next two years. This requires a further R13bn (€812m) in cash injections,” he said.
“Nearly R35bn (€2.19bn) of ordinary South Africans’ hard-earned money has been dedicated to keeping SAA in ‘business’. The reality is that the carrier is insolvent and bankrupt. It must be stabilised and sold off as soon as practically possible,” Maimane continued.
Consequently, the party is calling for Minister Gigaba to initiate business rescue proceedings for SAA in terms of Chapter 6 of the Companies Act (No. 71 of 2008). This will temporarily place SAA in the hands of a capable business rescue practitioner charged with returning the entity to a healthy financial position.
According to the DA, this will have to include:
- The removal of political interference both in strategy and in the employment of skilled and experienced management and staff;
- Aggressively pursuing profitable routes, some of which were abandoned over recent years;
- Renegotiating supply contracts, particularly major supplies such as jet fuel on the basis of best price for the required service quality;
- Adjustments to employee complement numbers to bring the airline in line with international staffing norms.
The DA will also be writing to Public Protector Busisiwe Mkhwebane, requesting an investigation into the role played by SAA board Chairperson, Dudu Myeni, in the “institutional decay and poor governance of SAA since 2009”, and Gigaba in his former and current role as Minister of Public Enterprises and Finance, respectively.
According to the DA, SAA has made R15bn (€937m) in losses under Myeni, and it rejects the idea that Gigaba’s Finance Ministry should find R10bn to supply to the airline.
“Myeni and Gigaba’s careers are intimately entwined with SAA’s demise and they must not be allowed to escape accountability,” Maimane said.
