CAPE TOWN - The DA will ask Finance Minister Tito Mboweni to put pressure on his Cabinet colleagues to carefully consider a proposed R21 billion private loan from a consortium of local and foreign investors to South African Airways (SAA), the party said on Sunday.
Reports on Sunday indicated that the loan was conditional on the consortium being given a 51% equity share in the national carrier, DA spokesman Alf Lees said.
Earlier, City Press newspaper reported that Fly Modern Ark and Cerberus Capital Management – a consortium of local and international investors – had made an unsolicited loan offer to SAA to the tune of R21 billion in return for a 51% stake in the bankrupt airline.
In September, City Press reported that SAA would need R21 billion between then and 2021, when the airline was expected to return to profitability.
Lees said, "The reported offer of the R21 billion loan looks attractive on the surface. The condition of the consortium taking a 51% equity share is particularly attractive as it would ensure that the ANC government loses all influence over SAA which would be free to conduct business without political interference that has dogged the airline in the past."
However, the offer may not be as attractive as it first appeared. Certain conditions should apply if the offer from the consortium was to be considered.
The loan should not be backed by any government/taxpayer guarantees; and be used primarily to extinguish all existing loans to SAA backed by government/taxpayer guarantees.
All existing government/taxpayer guarantees of R19.1 billion should be withdrawn from SAA and no further guarantees should be issued, Lees said.
"The R21 billion offer may be too good to be true and, in the end, the only solution will be to put SAA into business rescue. SAA is bankrupt and is only able to continue trading as a result of lenders having allegedly at the eleventh hour provided short-term funding of an additional R3.5 billion until the end of March. This will bring the SAA loans, repayable by the end of March 2019, to a massive R13 billion. Unless robust action is taken to put SAA into business rescue or an equity partner with deep pockets is found, the massive taxpayer bailouts of SAA will continue unabated," Lees said.