JOHANNESBURG - South African Finance Minister Tito Mboweni said on Thursday that he doubted that the government would find an investor to take an equity stake in struggling state-run South African Airways (SAA) in its current financial state.
“I doubt you are going to find an equity partner who will come into SAA in this current state. As an equity partner you’d have to immediately assume debt of some 21 billion rand ($1.5 billion),” Mboweni told lawmakers, a day after giving a bleak medium-term budget speech which rattled South African markets.
SAA yesterday received another R5 billion cash injection to prevent the recall of its R16.4bn debt by March next year.
The National Treasury said the government also agreed to allocate SA Express R1.2bn.
“SAA has a R19.1bn government guarantee, R14.5bn of which has been used. Debt of R14.2bn is maturing in or before March 2019. In 2018/19 government is allocating R5bn to help the airline repay this debt,” the Treasury said.
“In general SAA is not generating sufficient cash to repay its total debt and will have to negotiate with lenders or extend maturity dates.”
Finance Minister Tito Mboweni yesterday said that the government was planning to restructure the country’s state-owned enterprises (SOEs) to address their liquidity problems.
BUSINESS REPORT ONLINE/ REUTERS