Finance Minister Malusi Gigaba has spoken out against what he termed hysteria that has been created around the options government is considering to recapitalise South African Airways (SAA).
He was speaking at a briefing at Treasury following a meeting with the steering committee of the CEO Initiative on Friday.
He emphasised that government is still considering options to establish a proper capital structure of SAA, and that these proposals have not been finalised.
“I want to caution against any hysteria of us considering various options,” he said. Cabinet has appointed four ministers – Finance, Communications and Postal Services, Public Enterprises and Economic Development – to consider capitalisation options. Once an option has been considered, it will be presented to Cabinet before going through a Parliamentary process and then being announced to the public.
“The fact is R10-billion capitalisation is required for SAA, the form or source of recapitalisation is not finalised.”
The CEO Initiative raised concerns that government does not have the “luxury of time” to resolve issues.
“The credibility of government is on the line to finalise these issues as quickly as possible.” But Gigaba added that as government undertakes its work, it does not want to be “exposed” to any “hysteria”.
Gigaba spoke out against a leaked secret memo indicating that Treasury would bailout SAA using Telkom shares.
“The leaked memo was a secret document. All Cabinet documents are classified until they have been adopted by Cabinet,” he said. The classified document was meant only for the eyes of Cabinet members as they possess the relevant security classification to receive documents of this nature, he explained.
The act of leaking the document was criminal, and the source of the leak is being investigated. Thereafter the appropriate action will be taken against the person who leaked it, he said.
Jabu Mabuza, chair of the CEO Initiative and Telkom, urged government to be mindful of pronouncements that could have an impact on price sensitive shares.
“Please Minister, your colleagues – whether leaked or not leaked – when dealing with options, if they are a listed entity like Telkom, I urge due circumspection. Do not create unnecessary problems.”
Mabuza said that the recapitalisation of SAA is not only limited to the source of finance, but what the finance will be used for.
Among the options government is considering are the disposal of non-core assets, share equity, public-private partnerships and a full share swap with Telkom, Gigaba said.
Gigaba went on to explain the importance of having a state airline. He said that SAA could still turn around and run on a good, sound business model, with the right leadership and governance.
He added that Dudu Myeni served as SAA chair for eight years, two years longer than two terms. “It is time to hand over to a new chairperson to carry on the good work to be done at SAA,” he said.