SAA. Picture: BUSINESS DAY
SAA. Picture: BUSINESS DAY

SAA is due for major debt redemptions of R14.2bn before March, which poses a risk to the fiscus if the debt is not rolled over, Treasury acting deputy director-general in the budget office Ian Stuart says.

This is because the airline relies on R19bn in government guarantees.

In an interview on the sidelines of a meeting of parliament’s two finance committees, which were briefed by Treasury officials on its response to public submissions on the medium-term budget policy statement, Stuart said that of the R14.2bn in SAA debt redemptions, R5bn was due by the end of November and R9.2bn before the end of March 2019.

He said Treasury officials were assisting the department of public enterprises in its engagements with creditors who wanted to know whether SAA had achieved improvements in corporate governance, whether its cost-cutting measures had been effective and whether it was implementing its turnaround strategy.

Medium-term budget policy statement documents indicated that SAA had found R400m in procurement savings and had begun to make profits on most of its domestic and regional routes. It has also removed several senior officials linked to malfeasance.

The documents show that the debt redemptions of state-owned companies over the medium term are expected to average R66bn per year, a big portion of which is foreign debt. They note that several state owned companies are not making sufficient profits to be able to service the debt obligations falling due.

Stuart told MPs that the biggest risk to the fiscal framework were state-owned companies, with Eskom representing the biggest risk because of the size of its government guarantee of R350bn.

ensorl@businesslive.co.za

Please sign in or register to comment.