JOHANNESBURG - Minister of Public Enterprises Pravin Gordhan has said that the next best option for embattled state-owned South African Airways (SAA) is to be placed into business rescue.
Alf Lees MP - DA member of the standing committee on public accounts - said that the Democratic Alliance (DA) was pleased by Gordhan's decision.
Lees said in a statement, "The DA has long held that business rescue was the only viable option to prevent SAA from placing any further burden on our ailing economy and the taxpayer. It is very unlikely that the application for business rescue for SAA will be conceded to unless there is a further bailout, presumably amounting to R2 billion, from the South African taxpayer in order to provide the working capital required to enable SAA to continue trading."
If business rescue is awarded then it will take control of SAA out of the hands of the ANC.
"The business practitioner who is appointed must take robust action to immediately cut costs at SAA without any interference from the ANC. The DA will monitor this very closely in order to ensure that the ANC keeps its distance. With business rescue will come an obligation for the government guarantees of R19.1 billion to be honoured. This will require an increase in sovereign borrowings that in turn will increase debt service costs and place a further burden on taxpayers," Lees said.
Embattled SAA is set to be put into business rescue, the government announced. Picture: ANA
BUSINESS REPORT ONLINE