By Staff Writer
The South African government may sell its profitable Telkom stake to bail out the national carrier, South African Airways (SAA).
Fin24 reported on Friday that Finance Minister Malusi Gigaba has revealed the need to sell state assets in a bid to inject nearly R16 billion into SAA so it can repay loans.
The website said in his letter to Speaker of the House of Parliament Baleka Mbete, Gigaba revealed that SAA has to pay lenders R15.963 billion in 2017.
“The R2.207 billion bailout was a part of this total amount, which was given to SAA to settle its debt with Standard Chartered Bank through an emergency guarantee on June 30. That leaves another R13.755 billion that must still be paid, with cash SAA does not have. The South African government owns a direct 39.3% shareholding in Telkom.”
The DA said in a statement that it will robustly monitor Gigaba and National Treasury closely to ensure that the recapitalisation of SAA is budget neutral and that former Finance Minister, Pravin Gordhan’s, other commitments in his 2017 budget speech to prioritise a return of SAA to profitability as well as to expand private participation in SAA are adhered to.
“It is, however, appalling that SAA has been allowed to accumulate losses that amount to R15.7 billion over the last five years.”
In 2015, the government sold its 13.91% stake in Vodacom, South Africa’s biggest mobile phone operator by subscribers, to the Public Investment Corporation (PIC) to help fund the R23 billion allocation to the then struggling power utility Eskom.