File image: IOL
CAPE TOWN - The official opposition has said it would call for a debate in Parliament to discuss the financial meltdown at SAA as fears mount that the airline’s financial crisis would cripple it. 

DA MP Alf Lees said that they want the debate urgently to ensure that SAA would be able to operate despite threats of creditors to pull the plug on their loans amounting to billions of rands.

Lees had also tabled the motion in Parliament during the sitting last week, and it would be up to the National Assembly to decide if the debate will be held.

The national carrier is in deep financial crisis, with talk that Finance Minister Malusi Gigaba will recapitalise it for R10 billion through the sale of Telkom shares.

The Standing Committee on Public Accounts warned against this saying it poses more risks to the state.

Scopa chairman Themba Godi said at the weekend if the state sold Telkom shares it would reduce its stake in strategic entities. This would not be the first time it would have done so as it sold its stake in Vodacom to raise R23bn to fund Eskom in 2015.

In addition, the government converted its R60bn loan to Eskom into equity at the time.

Godi said that the situation was untenable and they did not want the government to go this route to address the problem of financial sustainability of state-owned entities.

He said they still wanted SAA to come to Parliament in the next few weeks to answer a number of questions, including its procurement policies and contracts.

No help

Lees said creditors were not prepared to help SAA because of the financial situation.

Earlier the National Treasury blamed the DA of chasing away investors after it leaked a cabinet memorandum on the planned recapitalisation of R10bn. SAA needs to pay its creditors R6.78bn by the end of September.

But Citibank has already indicated it wanted its R1.8bn loan paid back in full. This was the same route taken by Standard and Chartered Bank in July when it demanded the full payment of its R2.2bn loan.

It would submit its financials in the next few weeks in Parliament.

Lees said the debate by Parliament was urgent and cannot wait longer. “SAA recorded a loss of R1.5bn in 2015/16, which spiked to R4.7bn in 2016/17. At the current rate, it seems almost certain that the airline will record an even higher loss in 2017/18 than in the previous year,” he said.

“Investors are already not willing to invest, because of the poor state of SAA. In June, Standard and Chartered’s unwillingness to roll over their loan to SAA caused a R2.203bn bailout and recent revelations confirm that Citibank will not extend a R1.8bn loan due at the end of September,” said Lees.

Cabinet ministers have defended SAA and said they will not allow it to go under. This was first raised by Deputy Minister of Finance, Sifiso Buthelezi. He was supported by Tourism Minister Tokozile Xasa and Minister of Rural Development and Land Reform Gugile Nkwinti that the government will not privatise SAA.

They said they would ensure SAA did not collapse.

-BUSINESS REPORT