Reports: ANC NEC shoots down Mboweni proposal to liquidate SAA
According to the City Press, Tito Mboweni had proposed the embattled airline be liquidated.
JOHANNESBURG – Finance Minister Tito Mboweni's proposal to liquidate South African Airways (SAA) has reportedly been defeated during the African National Congress’s (ANC) national executive committee meeting and lekgotla.
According to the City Press, Mboweni had proposed the embattled airline be liquidated and a new airline started.
However, the meeting opted for a restructuring process instead which could reportedly cost government at least R10 billion.
The embattled state-owned company is fighting for its survival after it entered a form of bankruptcy protection last month and cancelled some flights due to cash shortages.
The paper is reporting that the ANC's directive to Treasury is to restructure the financially strapped airline and that could cost a further R8 billion to cover expenses related to the restructuring.
The paper says critics say liquidating Eskom could possibly cost R50 billion and that could result in an undesirable credit downgrade for the country.
SAA was promised R4 billion of funding from lenders and the government to sustain rescue efforts but only received R2 billion from lenders.
Mboweni has been instructed by the governing party's top brass to make R2 billion available to keep the airline going as part of the ongoing business rescue process.