PARLIAMENT, June 27 (ANA) – Both Treasury and South African Airways confirmed in Parliament on Tuesday that the Public Investment Corporation (PIC) was one of several options being explored to help the cash-strapped airline meet its financial obligations.
It emerged during a meeting of the portfolio committee on finance, that several billions of rand in loans was maturing on Friday (June 30), with at least one lender – Standard Chartered Bank – having indicated they would not renew its loan facility of R2.3 billion to the cash-strapped government-owned airline.
SAA chief financial officer Phumeza Nhantsi confirmed they were in talks with the airline’s lenders in a bid to roll over loans which were maturing on Friday and that they were also talking to the PIC.
“…whether we engaging PIC, we are in the process of diversifying our debt portfolio and the PIC is one of the various potential investors we are talking to. I just wanted to confirm that,” said Nhantsi.
She said SAA, together with the National Treasury, were in ongoing talks with lenders to come to a “solution to ensure the loans are extended”.
Treasury director-general Dondo Mogajane was a little more circumspect in his responses.
“The PIC is an option, not that we are going to the PIC. We have said that is one of the many options that are available for us,” said Mogajane.
He confirmed talks with the lenders, saying “indications are that they will roll over the loan”, but also confirming that they were having difficulties with one lender on the request for a rollover.
“In terms of the loans, we haven’t been sitting doing nothing….we have been meeting individually with some of the lenders and we also met them as a group..and over and above that we have teleconferences.”
Mogajane said Treasury understood the gravity of SAA’s debt woes.
“If we don’t meet our obligations, that has got a ripple effect on the whole guarantee framework of the whole of government, so we understand the importance and the urgency of not acting carefully and acting in a very responsible way as we approach the maturity of this loans on the 30th,” he said.
“We are seized with this matter and its important to note that if we don’t do anything about it, all guarantees may be called…”
Mogajane indicated that because of the sensitivity of talks, he would not say more.
SAA said despite the financial pressures it had continued to pay salaries and was prioritising this.
Chairwoman Dudu Myeni, who was the sole board member to attend the meeting, in her closing remarks said: “All salaries will be paid and it’s all sytems go…it’s only one lender we talking about on the rolling over on the 30th.
“We will take this committee in our confidence when we come back with a clear solution on how we going to move forward.”
Earlier during the meeting, MPs postponed a briefing on the airline’s first quarter results to August 3.
“The reasons we postponed the meeting to the 3rd of August because firstly the quarterly report that we got reached us only at 9 o’clock this morning. Secondly, it was very flimsy. Thirdly, it didn’t respond to specific questions, but also the board chair was here on her own and none of the other board members were here,” said committee chairman Yunus Carrim.
Carrim stopped any discussions on allegations by fellow board members accusing Myeni of not attending meetings and interfering with board matters.
“The accusation made about her are not fair unless she’s been given a chance to reply so no conclusions can be drawn on any accusation made about her lack of attendance of board meetings and other failures to perform until she’s been given a right to reply on the 3rd of August with other board members present,” he said.
It also emerged on Tuesday that Myeni flew aboard a British Airways (BA) flight to Cape Town to attend the committee meeting. Carrim, however, stopped her from explaining her choice of airline, saying he too had to use a BA flight on Monday because he “had no choice”.
“It would be extremely embarrassing for the SAA chair and the chairperson of a committee dealing with state-owned entities [to fly British Airway]…I’m sure there was a legitimate reason for that. Don’t respond.”
– African News Agency (ANA)
