South African Airways (SAA) will remain open for business, according to Finance Minister Pravin Gordhan.
In a statement released by National Treasury, it noted that the Treasury has been working with South African Airways (SAA) to ensure that it has the money to meet its payment obligations when they are due. This follows recent reports which revealed that Citibank had withdrawn its credit facility to SAA, placing SAA at risk of running out of funds.
Treasury has taken several steps to assist SAA. These include repatriating funds from overseas, as well as trying to secure additional short-term bridging facilities.
The funding
SAA already has R14.4 billion in government guarantees, of which R2 billion has reportedly not been utilised. According to Treasury, this could be tapped for additional financing.
“National Treasury has been in contact with several of the lenders currently providing SAA with unguaranteed short term facilities and indications are that the banks are not intending to withdraw their facilities at this time. Regular engagements with lenders have been taking place since 2014 and will continue until the airline is stabilised,” stated Treasury.
In addition, Treasury noted that it is in the process of considering a request made by SAA in December 2015 for a going concern guarantee. “The approval of the guarantee is essential for finalising SAA’s financial statements on a going concern basis. Once finalised, the Annual General Meeting will be held and the Annual Financial Statements will be tabled in Parliament.”
The goal of Treasury is to stabilise the airline in the short term and ensure that it has enough funds to meet its requirements. At the same time, governance and leadership issues are in the process of being addressed. This includes appointing a full board as well as appointing a permanent CEO. The final aim is for the airline to achieve a stronger financial stance for the medium to long term.
Gordhan stressed: “The goal in the longer term is to ensure that the airline is able to operate without support from the state, as should be the case with all State-Owned Entities.”
Police respond to investigation claims
The South African Police Service (SAPS) also released a statement yesterday, addressing claims that the Hawks were investigating the SAA chairperson.
“Recently, the Directorate for Priority Crime Investigation (DPCI/HAWKS) has noticed several inaccurate and misleading articles pertaining to the investigation of South African Airways (SAA) chairperson Dudu Myeni.
“The National Head of the DPCI Lieutenant General Mthandazo Ntlemeza would like to make the public aware that these articles are grossly inaccurate. It is against this background that the Lieutenant General Ntlemeza is compelled to provide the public with the correct information pertaining to the Hawks investigation,” stated the SAPS.
According to the SAPS, the DPCI was authorised to investigate illegal activities at SAA. These activities include “alleged theft, fraud and corruption involving contracts, agreements, tenders, procurement and irregular closure of SAA routes in Senegal, India and Beijing.”
Furthermore, the investigation is also tasked with probing allegations pertaining to sabotage, the irregular use of private investigators to spy and solicit confidential information.
Lieutenant General Ntlemeza stated: “To set the record straight the Hawks are not investigating the Chairperson, moreover since we began with the investigations last year she has been very instrumental in providing us with information regarding this important probe. It is seemingly evident that there are certain media who are reporting untruths and we want to distance ourselves from such gross reporting.
“For the record, Miss Dudu Myeni is not being investigated by the Hawks. We remain committed to carrying out our mandate of uncovering the truth at SAA and the public will be kept abreast of developments as and when it is necessary.”