Gordhan denies SAA R10bn in funding, gets dragged by the EFF

Gordhan denies SAA R10bn in funding, gets dragged by the EFF

- Pravin Gordhan has refused to give more money to South African Airways (SAA)

- The Minister of Public Enterprises refused SAA's Business Rescue Practitioners (BRPs) R10 billion

- The EFF does not agree with Gordhan's decision and claimed it was sabotage

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Pravin Gordhan has rejected a request by SAA's rescue practitioners for R10 billion in funding as part of the ongoing business rescue process.

Amid the lockdown and travel ban, SAA has used the R5.5 billion it received from several commercial banks and the Development Bank of South Africa (DBSA) to fund its rescue, the Daily Maverick reported.

The struggling SAA's rescue practitioners, Les Matuson and Siviwe Dongwana, approached the Department of Public Enterprises on 2 April.

They asked for an additional R10 billion in post-commencement finance - which SAA needs to continue operating while they were planning the final business rescue plan.

SAA can no longer approach local commercial banks and therefore would be funded through the extension of SAA’s foreign borrowing limits by the Department of Public Enterprises.

However, in a letter signed by the Public Enterprises minister, the government "will not support the extension of the foreign currency borrowing limit to permit foreign financing of the business rescue plan".

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The EFF does not agree with Gordhan's decision to refuse further funding for SAA. In fact, the Red Berets said the state-owned airways company was being "deliberately sabotaged".

The South African reported the EFF said in a statement on Wednesday that Gordhan "arrogantly" dismissed advisory measures provided by appointed BRPs.

The EFF added in the statement:

"Due to the unnecessary lack of oversight by the ministry of finance and general incoherence in governance, the Budget Speech which was supposed to allocate a budget to effect measures advised by BRPs for SAA, was silent. Instead, the budget availed R16.4 billion to repay legacy debt accrued by SAA as a result of poor management and inconsistency of fund allocation by government."

The EFF said the R10 billion bailout money should have been allocated to SAA long ago but it has not because of "Gordhan’s determination to collapse SAA and subject its employees to abject poverty".

Briefly.co.za gathered that the statement added that it was clear that Gordhan had no intention to help SAA or the employees who work for the airline. The ANC has previously lambasted Gordhan with similar claims about SOEs.

The Red Berets, who have been vocal in their opposition to Gordhan, said the minister had "no appreciation for the need for a domestic airline owned by the state".

The EFF called for the "multi-ministerial oversight of State-Owned Enterprises" to prevent Gordhan from "collapsing" them.

"To term, SAA’s requests for financial certainty, which are in line with what government has expected of them as bailouts further the narrative of the entity as a burden, while in reality it is being deliberately sabotaged,” the EFF added.

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Source: Briefly.co.za

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