THE MINISTER of Public Enterprises Pravin Gordhan has welcomed government’s commitment to provide R10.5-billion to be used to finalise the Business Rescue Plan and restructuring of South African Airways (SAA).
This comes after Finance Minister Tito Mboweni announced that government will allocate R10.5 billion to the SAA to restructure the airline as part of the government’s efforts to help state-owned entities.
The money will be granted to the airline early in January 2021.
The national carrier, which is insolvent, needs R19.6-billion to implement its business rescue plan.
SAA was placed in business rescue in December 2019, this as it faced a liquidity crisis.
On Thursday, Gordhan slammed critics of the bailout, particularly the Democratic Alliance.
“The Minister is shocked and disappointed with the Democratic Alliance (DA), other parties and some analysts’ lack of insight, financial literacy and understanding of governance processes,” his department said in a statement.
“Worse, the DA ignores the suffering of SAA employees and the threat of losing their jobs. In order to hide their knowledge of the aviation sector and its economics, the DA and their partners manipulate facts to fabricate false ideas about SAA.”
The department said it believed that the restructuring contained in the Business Rescue Plan for SAA is fundamental and will create a solid base for the emergence of a competitive, viable and sustainable national airline for the Republic of South Africa.
“The Ministry believes that the completion of the business rescue process is the only viable alternative to a viable and sustainable national carrier – one which supports job preservation and the ability to bring the airline back from the brink to a position where employees, suppliers, and business partners can continue to contribute to the South African economy and its integration into the global economy,” it added.
The department said the R10.5-billion will pave the way the finalisation of the business rescue process and restructuring of the airline through following activities:
· Appointment of an Interim Board;
· Appointment of an Interim Chief Executive Officer and Interim Chief Financial Officer;
· Implementation of a Social Plan – a training layoff scheme which will be facilitated by the Transport Education Training Authority in partnership with the Department of Labour and Employment;
· Selection of a suitable Strategic Equity Partner to strengthen the launch of the new airline;
· Settle the airline’s legacy debt including voluntary severance packages to employees and,
· Begin preparations for the formation of a new customer-centric airline designed to be lean, technology capable, digitally modernised and agile to service all market segments.
(COMPILED BY INSIDE POLITICS STAFF)