CAPE TOWN, Nov. 6 (Xinhua) — South African President Cyril Ramaphosa on Tuesday ruled out the possibility of selling out the South African Airways (SAA) amid a heated debate on the fate of the national carrier.
If the debt-riden SAA was sold out, paying the debt would possibly collapse the fiscus, Ramaphosa said while answering questions in Parliament.
Shutting down the SAA will also impact all state-owned enterprises, Ramaphosa said in response to a question raised by Democratic Alliance (DA) leader Mmusi Maimane who described the SAA as “fiscal risk.”
“Immediate payment of that debt has an impact on debt carried by all other state-owned enterprises and that can collapse the fiscus,” the president explained.
“If you were to sell SAA, you would not get any value for it, because of the debt it carries,” he added.
The SAA is burdened by a heavy debt, of which 14.2 billion rand (about 1 billion U.S. dollars) falls due in March 2019. The airline reportedly is considering selling off assets after banks have refused to lend it any more money.
The National Treasury has allocated 5 billion rand (about 352 million dollars) to the SAA to stabilize its debt.
Newly-appointed Finance Minister Tito Mbowen suggested in his Mid-Term Budget Speech last month that the state-owned SAA be privatized. His remarks have sparked a national debate.
Ramaphosa suggested opening the SAA and some other state-owned enterprises to strategic partners as a way of stabilization.
The future of the airline is linked to how it is stabilized, and one way to do that is to get a strategic equity partner to help take the airline forward, said Ramaphosa.
Rather than shutting down the SAA, it is important to first stabilize the airline, he noted.