South Africa has agreed to sell a majority stake in South African Airways, ridding the government of an entity that has long been a drain on state finances.
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South African Airways on Friday exited business rescue after 17 months. SAA was placed under administration in December 2019, and its longstanding financial woes worsened during the Covid-19 pandemic.
Eskom is expected to complete its unbundling into three divisions by December 2022, according to national treasury.
Government has told administrators of South African Airways that there is a “clear cabinet commitment” to provide the state airline with R10.5-billion of funds.
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 said.
Government plans to retain a minority shareholding in South African Airways while ceding management control to its investors, an official said.
Two unions on Friday rejected job cuts proposed to rescue South African Airways, which has cost the government more than R17-billion to stave off bankruptcy and will cost it about half that again to reform.
South African Airways’ administrators proposed the government put up at least R26.7-billion to rescue the carrier after years of losses and the grounding of commercial passenger flights.
Government has provisionally agreed to allocate at least R21-billion to the country’s embattled national airline to help repay debt and resume operations after the lifting of Covid-19 travel bans.
South African Airways administrators delivered a stark choice to those opposing their plan to fire the entire workforce and sell assets: it’s either that or full liquidation.