South Africa is considering an independent board for its ailing national airline, with a shareholder structure similar to that of part state-owned telecoms firm Telkom, a senior government minister told eNCA on Sunday.
Debt-ridden South African Airways has been in business rescue since December. Its creditors approved a rescue plan last week that involves scaling down its fleet, shedding thousands of jobs and a commitment of over R10-billion from government.
“Telkom is an interesting model that we could actually look at as we go forward,” public enterprises minister Pravin Gordhan said, adding that the new SAA cannot be run by a “bunch of amateurs”.
He did not specify if the revamped airline will be a listed entity.
Telkom is run independently and not bound by government guidelines set up for most South African state-owned enterprises.
The government directly holds a 40.5% stake in the listed entity and state-owned fund manager Public Investment Corp owns around 12.4%. The rest is owned by institutional investors and the public.
Gordhan said the government was still trying to secure the R10-billion required for the business rescue plan to succeed. “Now where it comes from, what form it comes in, is something is still being worked on.”
The public and finance ministries committed to finding the funds in a letter to the airline’s administrators. This is in addition to more than R16-billion the finance ministry set aside in its February budget to repay SAA’s guaranteed debt and debt-service costs.
He reiterated that the restructured airline will have a strategic partner, professional aviation managers and a more simplified salary structure. — Reported by Promit Mukherjee, (c) 2020 Reuters