Acsa in bid to seek R11bn from the Treasury to guarantee its debts
Acsa chief financial officer Siphamandla Mthethwa yesterday told Parliament that the state-owned airport operator was in talks with their lenders on relaxing some loan terms.
Mthethwa said that Acsa predicted a 50percent reduction in revenue for 2020, and a 40percent decline in 2021 because of Covid-19.
“New debt of R10bn to R11bn is required in the next five years, and this will require shareholder support in the form of government guarantees,” Mthethwa said.
“We need about R3bn in guarantees during the medium-term expenditure framework period,” he said.
Acsa’s operations and revenue sources have dried up due to travel restrictions, as airlines have been forced to ground their aircraft since the lockdown measures were announced at the end of March to curb the spread of Covid-19.
Acsa’s 2018/19 financial statements showed its debt stood at about R6.6bn after it managed to reduce it by R2.3bn last year. The company’s weighted average cost of debt was at 9.13percent, with gearing at 18percent.
The Treasury would not be drawn to comment on the guarantee, as Finance Minister Tito Mboweni will be tabling an Adjustment Budget next month.
“National Treasury does not comment on whether any state-owned company through their executive authority has applied for any government support, either in the form of recapitalisation or government guarantees,” the Treasury said.
“That said, entities are encouraged to ensure they remain financially sustainable through the implementation of robust business models, which must be able to take into account the changing environment they operate in.”
In September, Acsa reported that its profits had plunged 58.9percent to R227million for the year to end March 2019, weighed down by the weak domestic economy.
Ratings agency Moody’s downgraded Acsa’s credit rating status to Ba1 from Baa3 with a negative outlook in March due to a 30percent decline in expected passenger traffic.
Despite declining profits, Acsa’s revenue saw a 5.6percent increase to R7.1bn.
Mthethwa said Acsa had slashed its 2021 to 2023 capital expenditure budget from R17.9bn to R800m.
He said this would have an impact on major projects the company was developing, such as the new runway and terminal at Cape Town International Airport.
Mthethwa said operating expenditure had also been cut by 25percent, or R1.2bn, from R4.8bn to R3.6bn.
He said Acsa was making preparations for the anticipated easing of the lockdown restrictions with plans to open airports for domestic flights in June.