Govt considers asset sale to pay South African Airways debt

SAA Livery

The South African government is investigating which of its state assets it can sell off as it comes to the aid of South African Airways (SA, Johannesburg O.R. Tambo) with a ZAR2.2 billion (USD166.5 million) loan, reports Business Day. The government made the decision to bail out the airline in early July, afraid that a default would trigger a call on the National Revenue Fund guarantee.

"The government's decision to settle a debt owed by the airline to Standard Chartered Plc mustn't affect the balance of this year's budget," Finance Minister Malusi Gigaba said in a letter to parliament.

Business Day identifies Telkom SA SOC Ltd as a potential asset up for disposal. The government currently holds a 39.8% direct stake worth about ZAR13.5 billion (USD1.04 billion) in the telecoms company, and an additional 10.9% through the state-owned Public Investment Corporation.

As well as the Standard Chartered debt, South African Airways has other loans totalling approximately ZAR6.8 billion (USD512 million).

Source:https://www.ch-aviation.com/portal/news/58009-govt-considers-asset-sale-to-pay-south-african-airways-debt

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