Mboweni rescues SAA with another R17bn from taxpayers
The following adjustments were announced on Wednesday: R23 billion to Eskom; R6.5 billion to South African Airways (SAA) for settling its guaranteed debt and interest and an additional R10.5 billion is allocated to SAA to implement its business rescue plan; R84.7 million to the Independent Communications Authority of South Africa for the licensing of high-demand spectrum. – Editor
South Africa bails out insolvent state airline with $641 million – R10.5bn
By Paul Vecchiatto
(Bloomberg) — South African Finance Minister Tito Mboweni allocated 10.5 billion rand ($641 million) for the grounded state-owned airline to implement its rescue plan, taking money from other government departments.
Mboweni made the announcement in Wednesday's medium-term budget policy statement, ending a long personal resistance to funding further bailouts. The support adds to the 16.4 billion rand the Treasury set aside over three years in February for South African Airways to repay its guaranteed debt and cover debt-service costs.
South Africa's cabinet made the decision to fund the business-rescue plan and has not attached conditions, Treasury officials said in a lockup session before the budget presentation.
SAA was placed in administration in December, hasn't made a profit in almost a decade and has long relied on state support. Keeping it afloat is seen by opposition parties and some analysts as an expensive distraction for the government at a time when it needs to rescue the more crucial state power utility and reinvigorate economic growth.
