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Ramaphosa confirms Appropriations Bill for SAA bailout to be brought to Parly

SAA has loans worth about R6.8 billion due for repayment on 30 September.

FILE: A South African Airways flight takes off as another one is parked in a bay on the tarmac at OR Tambo International airport in Johannesburg. Picture: AFP.

CAPE TOWN - Deputy president Cyril Ramaphosa has confirmed that a special Appropriation Bill for a multi-billion rand bail-out for South African Airways (SAA) will be brought before Parliament.

Ramaphosa was asked about the national airline’s precarious financial state during question-time in the National Council Of Provinces on Wednesday afternoon.

Ramaphosa says SAA’S R6.8 billion debt that becomes due for repayment at month-end will be “resolved through a two-pronged approach”.

“Any funds being considered will have to be appropriated through a special Appropriation Bill which will, in part, assist the airline’s working capital and repay some of the maturing debt.”

Ramaphosa says SAA is talking to its lenders about extending the maturing debt to beyond the 30 September deadline.

“The precise makeup of the quantum of extension of debt and repayment of part of SAA’S maturing debt will be announced by the Minister of Finance and the SAA board at an appropriate time.”

Treasury Director General Dondo Mogajane says the special Appropriations Bill has already been drafted and that they’ll be going "cap in hand" to Parliament to ask for it to be processed.

SAA has loans worth about R6.8 billion due for repayment on 30 September.

One of the lenders, Citi Bank, has indicated that it is not prepared to roll over the R1.8 billion that it is owed.

The national airline is currently not in a position to sign off on its annual financial statements as a going concern, due to its cash flow problems.

On Wednesday, SAA appeared before Parliament’s Standing Committee on Finance, where Dudu Myeni’s extended tenure as board chair was also in the spotlight.

SAA needs working capital of R2.4 billion to see it through to March next year.

Mogajane says talks with lenders are continuing to try and roll over much of the nearly R7 billion in debt that becomes due in two weeks’ time.

“It is drafted, from our side, we are ready (with the special Appropriations Bill) - but we just have to go to Parliament to say 'please, can we consider this'.”

Mogajane says they're still looking at options for finding the R10 billion, including the possible sale of the government's stake in Telkom.

Deputy Finance Minister Sfiso Buthelezi's told the committee they are also considering strategic equity partners for SAA, including the possibility of a debt-for-equity deal with lenders.

Meanwhile, it's emerged that Cabinet has yet to approve Finance Minister Malusi Gigaba's extension of Myeni's tenure as board chairperson until SAA's AGM on 3 November.

This puts a question mark over the legality of her position.

With Parliament going into recess on Monday, it’s possible a special sitting may have to be called.

(Edited by Winnie Theletsane)

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