Pravin Gordhan Says State Will No Longer Fund Embattled SAA in Future
- Minister Pravin Gordhan revealed that the government will not contribute to South African Airways in the future
- At the moment, Gordhan revealed that restructuring costs are being taken by the State but any capital in future will come from a partner
- The embattled airline has been grounded for over a year and received a R10.5 billion government bailout last year
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Minister of Public Enterprises Pravin Gordhan said that the government will take responsibility for all restructuring costs in terms of South African Airways (SAA). The embattled airline was allocated R10.5 billion last year for business rescue.
Gordhan was speaking to Parliament's Standing Committee on Public Accounts (Scopa) and Business Rescue Practitioners (BRPs) on the rescue process. The Minister stated that no further contributions will be made to the state-owned entity.
Gordhan made revealed the news after Democratic Alliance MP Alf Lees inquired about any further funding towards the airline from the state after the conclusion of the business rescue process.
Source: Getty Images
A report by TimesLIVE revealed that Gordhan reiterated that the fiscus is not required to make contributions to SAA in the future. Gordhan stated that there is a parallel process taking place with a strategic equity partner.
He added that interested parties have had discussions that resulted in the decision to have the government take responsibility for restructuring costs while the partner will come in with any future capital.
MoneyWeb reported that the embattled airline had not made any profit for more than a decade and has relied solely on bailouts from the government to keep business running. SAA was grounded since last year.
Previously, Briefly.co.za reported that R200 million was spent on SAA while employees remained unpaid. According to a reliable publication that claims to have seen documents containing information about the beneficiaries of the fund, practitioners Les Mattison and Siviwe Dongwana pocketed a combined R59 million.
The largest piece of the R200 million has allegedly gone to a law firm called Edward Nathann Sonnenbergs (ENS), which got R45.4 million. A bunch of unnamed consultants also received R97.3 million.
The employees have not been paid since April last year after the pandemic knocked the final bit of breath out of the already-struggling airline. Many of them have expressed disdain at the professionals who were meant to rescue the airline and subsequently their jobs.
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Source: Briefly News
