Deputy Minister of Finance Mondli Gungubele says it will cost approximately R60 billion to privatise the cash strapped South African Airways (SAA).
He was briefing parliament’s Standing Committee on Appropriation on the progress made by the airline, following its R10 billion recapitalization by Treasury late last year.
Gungubele says SAA’s turnaround strategy is being received positively by funders and other stakeholders in the aviation industry. But he says the airline will still need a capital injection in order to break-even.
The airline is far from recovery. Its R9,2 billion loan is about to mature, and liabilities amounting to almost R18 billion.
It will require a further R12 billion between now and March next year.
Gungubele says government takes responsibility for the sinking SAA into debt.
“Our calculations chair is that the implications are not less than R60 billion compared to what we are raising now but we accept chair that we have to take accountability to parliament in as far as this.”
He says “The entity has got serious financial challenges. It got serious corporate governance challenges… If you offer the medicine, the medecine is for a purpose.”
Watch below for more: