Finance Minister Malusi Gigaba Picture: Reuters

JOHANNESBURG - Finance Minister Malusi Gigaba has asked Speaker Baleka Mbete to extend the deadline for SAA to submit its audited annual financial statements to parliament because of financial problems at the airline. In a letter to Mbete yesterday (THUR), Gigaba said SAA had serious challenges that needed to be addressed before the financials were tabled.

“Due to financial challenges faced by SAA and the fact that SAA’s external auditors have raised concerns regarding SAA’s going concern, SAA has missed the deadline for submitting audited financial statements on or before 31 August to the shareholder as stipulated in the Public Finance Management Act,” Gigaba said in his letter to Mbeki.

“The delay in finalising the SAA’s annual financial statements also means that as the Executive Authority responsible for SAA, I would not be able to table the SAA’s annual report and audited report on or before the stipulated date (September 30) by the PFMA. Therefore, I humbly request extension of the deadline for tabling SAA’s annual report to November 30.”

SAA missed the mandatory 30 September deadline for all departments and state entities to submit financials to parliament.. Gigaba said he has missed the deadline because of circumstances beyond his control. 

This is the third time SAA has asked for the extension of the deadline to submit the financials in Parliament. Former Finance Minister Pravin Gordhan also asked for extensions during his tenure because of the serious financials problems at the airline. The reports for 2014 and 2015 were delayed until they were tabled in Parliament later.  

SAA had posted heavy losses of R4.6 billion and R1.6bn respectively.

The request by Gigaba to extend the deadline comes after he extended a bailout of R3bn to SAA to pay Citibank and R2.2bn to Standard Chartered Bank. SAA has been scrambling for cash over the last few months with the lenders demanding R6.8bn owed to them by the end of September. However, Gigaba tapped into the National Revenue Fund to get R3bn to pay Citibank.

SAA had told Parliament there were nine other lenders who were keen to extend the loans until certain conditions have been met. SAA also said they would soon appoint the restructuring officer to deal with some of the problems at the airline. 

Gigaba is expected to announce plans in his mid-term budget on the recapitalisation of SAA. It was reported yesterday incoming CEO Vuyani Jarana met with a British industry expert to turn around SAA.

Part of the work of the external restructuring expert is to deal with the conditions of the lenders and return the airline to profit.