Business In The News South Africa

Treasury hopes to raise R3.9 billion by selling Telkom shares

PARLIAMENT, October 25  – National Treasury hopes to raise R3.9 billion by selling a portion of its Telkom shares to find the cash it needs to shore up South African Airways, Finance Minister Malusi Gigaba confirmed on Wednesday as he presented his first medium-term budget policy statement.
Gigaba told a media briefing he was obliged to liquidate an asset to fund part of the R13.7 billion required to inject R10 billion into the national carrier and R3.9 billion into the South African Post Office.
“The fiscal framework is at risk of being breached by R3.9 billion, so we need to sell something that will bring us that R3.9 billion,” he said.
“The impact of breaching the ceiling will be quite severe.”
National Treasury has so far given the loss-making national carrier R5.2 billion this year to pay its creditors. Gigaba confirmed on Wednesday that it would receive a further R4.8 billion before the end of the financial year to service debt and cover operational costs.
The opposition has criticised the bailouts and suggested that Gigaba acted illegally by not submitting a special appropriations bill to Parliament to seek approval for the recent allocation of R3 billion to prevent SAA from defaulting on its Citibank loan.
Deputy Finance Minister Sibusiso Buthelezi said he wanted to stress that bailouts were “very painful for us to do”.
Gigaba in his speech cautioned state-owned enterprises that he was not prepared to continue using state funds to help them out of self-inflicted trouble.
“As the shareholder, we are tired of being dragged into crises by those who we employ to govern and manage state-owned enterprises. This must end.”
The minister last week announced the departure of SAA chairwoman Dudu Myeni after a controversial five-year tenure in which the airline lost some R15 billion.
– African News Agency (ANA)

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