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South Africa considers assisting its loss-making airline from collapse.

According to the SA’ Deputy Finance Minister, Sfiso Buthelezi the measures would save the loss making company from collapse.

South Africa considers assisting its loss-making airline from collapse.

According to the SA’ Deputy Finance Minister, Sfiso Buthelezi the measures would save the loss making company from collapse.

24 August 2017 Thursday 16:19
South Africa considers assisting its loss-making airline from collapse.

By Azania Post Reporter

 THE South African government has started taking measure to save the ailing South African Airways (SAA), authorities has confirmed.

According to the SA’ Deputy Finance Minister, Sfiso Buthelezi the measures would save the loss making company from collapse.

He told the Parliament yesterday in Johannesburg that SAA would not be allowed to "go under."

Already the treasury spokesman, Mayihlome Tshwete, has announce plans to sell government’s stakes in Telkom to fund the airline.

He said they are considering selling its stake in landline provider Telkom to fund a 10 billion rand ($757 million) bailout of SAA.

The airline runs one of Africa's biggest fleets but is loss-making. It received state funds in July to help to repay debts and also depends on government debt guarantees of about 20 billion rand.

"It's an option among others we are looking into, and nothing has been finalised," Tshwete said.

He was responding to comments by opposition Democratic Alliance party lawmaker Alf Lees, who told parliament Treasury was looking to sell its stake in Telkom to fund SAA.

The government holds a stake of about 39 percent in Telkom, while government pension fund the Public Investment Corporation holds another 11.4 percent.

Gigaba has said he would disclose a preferable financing option for SAA at the medium-term budget statement in October.

The Democratic Alliance party has called on the government to privatise the airline.

"We have seen this movie before and we know how it ends – SAA continues to fail and will need more bailouts," Lees said in a statement, adding that bailouts of state firms were depleting the state coffers and were also a cause of credit ratings downgrades.

Credit ratings agencies say SAA should be reformed and cite the cost of propping it up as a threat to South Africa's credit rating. S&P Global Ratings and Fitch have downgraded South Africa's credit to "junk" status.

Azania Post

Updated: 24.08.2017 16:31
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