JOHANNESBURG - South African Airways (SAA) chief executive Vuyo Jarana has welcomed government's review framework for state-owned enterprise (SOEs) support as announced by Finance Minister Tito Mboweni on Wednesday.
Mboweni announced in his budget speech that government would increase its debt guarantee to SAA by R6.2 billion, with stringent measures, after giving it R5 billion in October. The debt-ridden airline has a R20 billion debt hole in its balance sheet.
"If a state-owned enterprise applies for a government guarantee for operational purposes, it will be required to appoint a chief reorganisation officer (CRO) in concurrence with the National Treasury and its bondholders," Mboweni said.
"The CRO will undertake a full operational and financial review. When banks need state support, we appoint a curator. When provincial and municipal finances are in disarray, government can take over the running of the administration. These rules should also apply to all SOEs."
Jarana said the measures announced by Mboweni for accountability at SOEs would bring a greater commercial focus, and profit and loss accountability at SAA.