Johannesburg, SOUTH AFRICA
South African Airways (SAA) has
put up for sale nine of its Airbus aircraft, according to a tender document
seeking proposals from interested buyers that was seen by reporters on
Thursday.
SAA,
which was placed in a form of bankruptcy protection late last year, is selling
the Airbus A340-300s and A340-600s as well as 15 spare engines, the document
said.
The
development comes even as South Africa is scrambling to secure extra
funding in a last-ditch bid to to rescue the national carrier and around 10,000
related jobs.
Tito
Mboweni, the country’s finance minister, told business leaders in Johannesburg
ahead of the World Economic Forum annual meeting in Davos next week that the
Treasury had provided “financial support to the best of our abilities”.
“As of
yesterday when I was speaking to the director-general of National Treasury we
were still trying to find additional financing for SAA. ... Let’s keep our
fingers crossed,” he said.
SAA was
promised two billion rand ($139 million, Sh13.9bn) from the government and another
two billion rand from lenders. But while the lenders paid up, the Treasury has
yet to establish a mechanism for identifying and dispersing its share.
The
airline is one of several state entities, including state power company Eskom,
struggling with debt after nearly a decade of mismanagement.
Their
woes are seen as the single greatest threat to Africa’s most industrialised
economy and have been largely responsible for bringing South Africa’s credit
rating to the brink of junk.
Fearing
another downgrade if it raises its deficit, South Africa’s finance ministry has
sought to fund SAA in a “fiscally neutral” manner, by selling assets or cutting
costs elsewhere.
Handling
these issues is seen as the biggest test of President Cyril Ramaphosa’s
commitment to economic reforms.
“The pace
of structural reforms is not the way we want it to be, so we need to speed it
up to generate this impetus to economic growth,” Mr Mboweni said.
But
without cash, SAA could very quickly become insolvent.
On
Wednesday, business rescue practitioners Les Matuson and Siviwe Dongwana said
they were “hopeful that a mechanism can be found to unlock the liquidity
constraints.”
However,
a trade union official warned that SAA could be forced to suspend some flights and
delay salary payments if the government does not pay up very soon.
The
government’s treatment of SAA and whether it is willing to sacrifice jobs will
send a signal ahead of a much bigger battle with unions over ailing state
utility Eskom, which is struggling to keep the lights on.
Eskom’s
chairman resigned last week after power cuts even during the low-demand holiday
season. The company is also fighting the regulator in court over energy
tariffs.
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