Selling off assets won't save SAA‚ says DA
Selling off the assets of SA Airways (SAA) will not save the national carrier‚ the DA says.
“The state of SAA and other state-owned enterprises must be placed squarely at the feet of the failing ANC. Under their watch‚ state entities have disintegrated because of corruption and gross mismanagement‚” DA shadow deputy minister of finance Alf Lees said on Sunday.
He added that the DA‚ through parliament‚ would do all it could to rescue these entities from further ruin.
This comes after City Press reported on Sunday that SAA was considering selling off assets after banks refused to lend it any more money.
At the end of July‚ SAA’s debt was reportedly R15bn more than its assets.
The Sunday newspaper said a confidential report was presented at a company board strategy session 10 days ago. It revealed the airline was looking at various cost-cutting measures‚ including selling off its catering arm‚ Air Chefs‚ and outsourcing or selling SAA Cargo.
Lees said SAA needed to:
- Be put into business rescue;
- Appoint a business rescue practitioner who has experience in the airline industry;
- Recover under business rescue and be privatised.
“Despite the government guarantees of R19.1bn that are available to SAA‚ commercial banks are apparently unwilling to lend more to SAA‚” Lees said.
“The DA has for the last three years maintained that SAA has been and is bankrupt and that the airline cannot trade its way out of debt.”
He added: “In the latest corporate plan‚ SAA is set to receive government bailouts to the tune of R13bn over the next two years‚ however‚ the additional losses will mean that the taxpayer will have to cough up more‚ at least R14bn in total.”