As the technically bankrupt South African Airways (SAA) fights off lenders in an attempt to stay afloat, finance minister Malusi Gigaba has promised tough conditions would be attached to any potential bailout given to the struggling airline, Business Day reported on Monday.
Gigaba is reportedly leading negotiations with SAA's lenders in an effort to postpone loans due at the end of September. SAA's chief financial officer Phumeza Nhantsi told MPs in Parliament on Friday that SAA had to find R6.9billion to settle its loans due at the end of July, but that SAA had managed to buy some time until the end of September.
Meanwhile, embattled SAA chairwoman, Dudu Myeni promised to crack the whip at SAA, Eyewitness News reported on Monday. She reportedly told MPs:
"The people that are stealing at SAA are the ones who hate me today. They are stealing the reports are showing, it will come out."
According to Business Day, Treasury has also not confirmed rumours that it will sell its stake in Telkom to fund an SAA bailout. Gigaba reportedly told MPs on Friday:
"I have not said we will sell our shares in Telkom. We will look at where we will find the funding for a recapitalisation."
SAA reportedly told Treasury it will need R13billion over the next three years, and is currently operating on the basis of a R19.1billion government guarantee which would have been triggered had it defaulted on its loans at the end of last month, Business Day reported. One of its lenders, however, would not budge, and the National Revenue Fund had to fork out R2.2billion to settle a debt due at the end of July.
Gigaba is reportedly due to make an announcement on whether Treasury will bailout SAA again during his medium-term budget in October.
"There is no way we are going to give SAA money for free," Gigaba reportedly said. According to Business Day, he said SAA would have to show that the airline was worthy of more state support, and Treasury would exercise strict oversight, including "aggressively" implementing SAA's turnaround strategy.
Gigaba reportedly told MPs that Treasury and SAA meet weekly to assess progress, and that the turnaround plan involves SAA making a profit in 2020. It is expected to make a loss of R2.8 billion in 2018 and R1.8 billion in 2019.