Independent on Line reports that South African Airways has debts amounting to over R19.1 billion. They have owned up to the debts but say that they are only due to be paid this year and next year. However some of the due by dates have already past and they are in effect over R7 billion in arrears.
DA spokesperson Alf Lees is very concerned about how the situation is going to be managed. It appears that settlement of some of the debts has been demanded and no extensions will be considered. Lees is requesting that Malusi Gigaba supply answers to how these debts are going to be managed. The first thing that needs to be settled is have the overdue loans been repaid or has some arrangement been made. The second concern is that the companies who issued the loans may be considering payment.
As the government is the guarantors for these loans how are the loans going to be repaid. Is this going to come from tax payers? This will have many repercussions and could lead to an even further international embarrassment.
Lees suggests that the best way out of this cash strap is for SAA to apply for business rescue. Ultimately a rescue would lead to privatisation. This would release the government from having to use tax payer’s money to repay the loan.