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Gigaba hopes Angola's new government will settle its SAA fare debt
SAA has received a commitment from the Angolan government to pay the money it owes for airline tickets, Finance Minister Malusi Gigaba says.
Angola is one of four African countries that owe South African Airways (SAA) more than R1bn for airline tickets. The others are Zimbabwe, Senegal and Nigeria.
"SAA has faced, over the years, serious revenue management challenges. They have resulted, amongst others, in being owed fees from certain governments totalling about R1bn," said Gigaba.
"We are addressing that internally. We are also engaging with the governments owing us, including the Angolan government, for the repatriation of the money they owe us so we can close down on those books."
Gigaba said Angola was aware of the importance of SAA's financial stability.
Repatriation discussions
"We have discussed with the Angolan government about repatriation. We hope and expect that the new government is going to continue to honour the agreement which we have reached. We know that Angola is facing many economic challenges, but so are we and many other countries."
More clarity would be provided, he said, on whether SAA would get a bail-out in September. SAA's financial state was dire and a bail-out could be the only way out of the quagmire, apart from privatisation.
"We expect that to be made by September, given that the current credit line has been rolled over until the end of September. So, we need to make a decision by then which would enable us to inform the lenders of the financial arrangements and capital structure that is going to be finalised this year."
Discussions with lenders, affected parties
All except one of the national airline's major lenders was willing to roll over its loans to accommodate September, he said. However, discussions with all lenders and affected parties would continue.
"At the moment, it's Citibank and we are negotiating with other lenders to possibly continue rolling over until we are in a better position and until we have a proper financing model. We are exploring various financing options," he said.
"There are a number of companies that require funding from the government. I am obviously taking a hard line on the matter, given the fact that SA is in a difficult fiscal situation. The fiscal outlook is quite difficult.
"There is no money lying around for us to bail out state-owned companies."
Referring to state-owned enterprises in general, Gigaba said the space SA had on the expenditure side of the budget had become limited.
"It will not be possible for us to announce bail-outs for everybody now. It may happen over the next few financial years, but I am taking a hard line.
Stance on bail-outs
"Clearly, the government needs to take a stance on bail-outs. Either it runs as a business, or it goes down."
Government guarantees, he said, should not be used to fund operational expenditure.
"Ministers must be hard on the agencies they lead. They place demands on them and have high expectations of them and tell them that we are in a difficult fiscal space and nobody must continue behaving as though the economy is growing at 5% per annum.
"We need to be very constrained in what we do."
Source: Business Day
Source: I-Net Bridge
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