SABC R2.1bn partial bailout: Five conditions of eight have been met
DURBAN – The South African Broadcasting Corporation (SABC) will receive R2.1 billion of its R3.2 billion bailout on Monday, communications minister Stella Ndabeni-Abrahams announced on Friday in Pretoria.
The remaining R1.1 billion would be transferred to the ailing public broadcaster when three outstanding conditions had been met, said Ndabeni-Abrahams.
In his February budget speech, finance minister Tito Mboweni said the broadcaster would be considered for a bailout subject to several preconditions being met.
Ndabeni-Abrahams said that in its response to the preconditions submitted by the SABC in August, it had been found that the broadcaster had met five of the eight conditions set by national Treasury.
The conditions that had been met were:
- The determination of immediate cash requirements for the next 12 to 18 months;
- A detailed breakdown of how revenue enhancement was to be achieved, including cost cutting initiatives;
- A thorough investigation had to be initiated into what caused the financial collapse of the broadcaster and why previous turnaround plans had failed;
- An update had to be provided of how the SABC was dealing with people implicated in investigations;
- A turnaround plan had to be developed taking into account various reports into the broadcaster, including those done by the Public Protector, Special Investigation Unit, Auditor General and Parliament.
The two partially met conditions included the production of separate financial reporting for public and commercial broadcasting services, and the identification of non-core assets for disposal which would assist with recapitalisation requirements.
The minister said the broadcaster had not met the conditions to develop a comprehensive private section participation strategy or clearly highlighted initiatives to be implemented and the net value that could be derived from these partnerships.
“However, willingness to work on this condition had been expressed, and was welcomed by national Treasury and the department of communications,” said Ndabeni-Abrahams.
The SABC had demonstrated evidence that it would fully comply with the remaining conditions, she said.
When it tabled its annual report in Parliament last week, the broadcaster reported a net loss of R482.4 million at the end of March 2019.
But according to the SABC, the net loss was a 35% improvement on the restated loss incurred in the 2017/18 financial year. The main contributors were losses incurred on sporting events and interest incurred as a result of liquidity constraints.
A further contributor to the loss was the decline in total revenue by 3% to R6.4 billion from that of the 2017/18 financial year, according to the SABC.
Total expenses declined by 6%, or R475 million, to R7 billion from that of the 2017/18 financial year.
- African News Agency (ANA)