SAA R10bn rescue from sale of stake in Telkom

24 August 2017 - 05:46 By Babalo Ndenze
South African Airways plane. File Photo
South African Airways plane. File Photo
Image: Business Day

Cash-strapped SA Airways is to get a R10-billion bailout through the sale of the government's multibillion-rand stake in Telkom, parliament was told on Wednesday.

DA MP Alf Lees dropped the bombshell in the National Assembly during question time with Deputy President Cyril Ramaphosa when he presented a cabinet memorandum leaked to him as a member of parliament's finance portfolio committee.

The secret memo indicates that cabinet is due to approve a request from Finance Minister Malusi Gigaba to introduce in parliament a special appropriation bill proposing the appropriation of R10-billion to SAA in the current 2017-2018 financial year.

Lees presented the memo using parliamentary privilege that protects him from possible prosecution.

Do you support the sale of a good asset to save a bad asset?
DA MP Alf Lees

The draft bill would allow for the release of R7-billion to be transferred to SAA in tranches and for Gigaba to impose certain conditions.

A government guarantee of R2.2-billion was transferred to SAA on June 30 this year.

The sale of the government shares in Telkom is valued at R14-billion, or 40% of the parastatal.

"This was handed to the executive yesterday and indicated Gigaba is planning to give SAA a R10-billion bailout primarily by selling government shares in Telkom.

"Do you support the sale of a good asset to save a bad asset, and has cabinet approved this move?" asked Lees.

Shortly thereafter, Ramaphosa and Gigaba were seen exchanging notes before Gigaba rushed out of the house.

EFF MP Mbuyiseni Ndlozi said it was questionable that the government was
sacrificing its shareholding in Telkom for a badly run SAA.

"How do you explain selling your stake in Telkom to go and reward Dudu Myeni (chairman) in SAA ... selling it to go and save an incompetent, corrupt board in SAA," he said.

But Ramaphosa said strategic assets owned by government remained under constant review.

"We continue to discuss assets that are strategic. Issues like that are always
discussed by government, cabinet and indeed by committees," said Ramaphosa.

Gigaba's office could not be reached at the time of going to print on Wednesday.

The news came just hours after the management of SAA and Myeni were grilled by the Standing Committee on Public Accounts about financial mismanagement amounting to billions.

Myeni told Scopa SAA was in advanced negotiations with the Treasury to get more state funding to keep the airline afloat.