While Minister of Finance Tito Mboweni says he has not authorised the use of funds from the National Revenue Fund for emergency funding to implement the business rescue plan of South African Airways, he does not exclude the possibility of approaching “institutions” to invest pension funds for this purpose.
More than seven months after it went into administration, the airline’s creditors eventually voted to proceed with its proposed business rescue plan last week. This requires government or a strategic equity partner to provide an additional R10.3 billion in funding.The flag carrier’s rescue plan stipulates that all requirements must have been fulfilled by Wednesday, July 22.
Mboweni sets out that there are a number of options which government may explore to “mobilise” such funding. These include government retaining a portion of the issued share capital in a newly formed airline, approaching private equity partners or strategic partners to acquire shareholding in the new airline, approaching “institutions” to invest pension funds, or approaching local private investment institutions and global investment institutions regarding funding.
“This means the DA has achieved its immediate goal of preventing this bailout from happening secretly, behind the scenes, as happened previously when former minister Malusi Gigaba, used his ’emergency powers’ under Section 16 of the PFMA,” said Hill-Lewis. For the DA Mboweni’s statement, however, raises new alarms about how SAA might be bailed out using pension funds to “invest” in a new airline. The party said it is concerned that this raises the prospect of state-owned asset manager the Public Investment Corporation being forced to give money to the airline.
As far as he is aware section 16 of the PFMA had been invoked in the past to provide finance for SAA. This was in 2017 when City Bank was not prepared to extend its credit to SAA and had insisted on immediate payment.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: TheCitizen_News - 🏆 6. / 75 Read more »
'DA's move to stop SAA funding a waste of the court's time': MboweniA Twitter spat between finance minister Tito Mboweni and the DA shadow minister of finance, Geordin Hill-Lewis, has escalated after the opposition party's urgent application to stop Mboweni from bailing out SAA was made at the High Court in Pretoria.
Source: TimesLIVE - 🏆 28. / 59 Read more »
'DA's move to stop SAA funding a waste of the court's time': MboweniA Twitter spat between finance minister Tito Mboweni and the DA shadow minister of finance, Geordin Hill-Lewis, has escalated after the opposition party's urgent application to stop Mboweni from bailing out SAA was made at the High Court in Pretoria.
Source: SowetanLIVE - 🏆 13. / 63 Read more »
Mboweni says he has no plan to use emergency powers to fund SAAFinance Minister Tito Mboweni has said in court papers that he has taken no decision to use emergency powers to avail money from the National Reserves Fund to SAA to bankroll its business rescue plan.
Source: IOL - 🏆 46. / 51 Read more »
Source: dailymaverick - 🏆 3. / 84 Read more »