[dropcap]G[/dropcap]overnment may be forced to sell part of its stake in Telkom to fund South African Airways, it was reported on Friday.
News24 reported finance minister Malusi Gigaba as saying saying that government needs to sell state assets in order to rescue the floundering national airline, which needs billions in state aid to repay loans.
The website said Gigaba has written to speaker of parliament Baleka Mbete, informing her that in order for SAA to repay loans of R16bn due in 2017 — only R2.2bn of which has been repaid so far — government will have to consider asset sales.
The minister is expected to provide more details about his plans when he presents his “mini budget” in October.
In a statement on Friday, Alf Lees, the Democratic Alliance’s deputy spokesman of finance, said the party noted Gigaba’s report to parliament but said it is “appalling that SAA has been allowed to accumulate losses that amount to R15.7bn over the last five years”.
“The DA will robustly monitor Gigaba and national treasury to ensure that the recapitalisation of SAA is budget-neutral and that former finance minister Pravin Gordhan’s other commitments in his 2017 budget speech to prioritise a return of SAA to profitability as well as to expand private participation in SAA are adhered to.”
Government holds a direct 39.3% stake in Telkom, worth R13.6bn at the of writing. The Public Investment Corp, which makes investments on behalf of government employees, holds just over 11% of the company, worth about R4bn. News24 incorrectly reported that the PIC’s stake in Telkom is worth R14bn.
A Telkom spokesman declined to comment. — (c) 2017 NewsCentral Media
