Mcebisi Jonas defends loan guarantee to SAA

Jonas has been addressing Parliament’s Standing Committee on Finance where SAA is expected to be grilled.

FILE: Deputy Finance Minister Mcebisi Jonas during press briefing on 16 March 2016. Picture: Screengrab

JOHANNESBURG - Deputy Finance Minister Mcebisi Jonas has defended the nearly R5 billion guarantee extended to ailing national airline South African Airways (SAA).

Jonas has been addressing Parliament's Standing Committee on Finance where SAA is expected to be grilled by Members of Parliament on its finances and turnaround plans.

He says the airline needed the loan guarantee in order to sign off on its long-delayed 2014-15 financial statements as a going concern.

"If we did not provide the going concern guarantee to SAA, that would have posed systematic risks for all SOEs in the country."

SAA officials have been briefing MPs despite the absence of board chairperson Dudu Myeni, who arrived an hour-and-a-half late apparently due to a doctor's appointment.

Meanwhile it's emerged from figures presented here that SAA racked up a much larger loss two years ago than initially estimated in its provisional financial statements released last week.

The loss for 2014-15 was projected at R4,67 billion.

But MPs have now been told the loss is R5,64 billion, nearly a R1 billion more. These results are still provisional as the auditors are dealing with a technical issue.

Opposition MPs have observed that SAA is technically insolvent