SAA, which exited business rescue about two years ago, is no longer technically insolvent, reports BusinessLIVE. MPs were told yesterday by the Treasury that the national airline had a net equity value of R1bn at end-December.

A number of Treasury officials led by its chief director of SOEs, Ravesh Rajlal, gave an update to Parliament’s Standing Committee on Appropriations on the current status of SOEs.

After exiting business rescue, SAA remained under care and maintenance until September 2021 when it resumed operations, flying to a limited number of destinations.

MPs were told that SAA’s net group loss of R50m for the first three quarters of the year was a significant improvement from the budgeted loss of R637m.

The sale of a 51% stake in SAA to the Takatso consortium – with government retaining 49% – still has to be finalised. SAA subsidiary Mango has been in business rescue since August 2021 and its business rescue practitioner is focusing on securing a strategic equity partner.

In terms of the Land Bank, Treasury’s Lefentse Radikeledi said the bank remained in the default which was triggered in April 2020. Three versions of the liability solution have been rejected by lenders thus far and the bank is currently negotiating the fourth liability solution with its lenders.

On Eskom, Treasury noted that as at end-December, R323bn (92%) of the R350bn government guarantee facility granted to Eskom had been committed, leaving R27bn unallocated for future funding.

Eskom’s guarantee facility agreement is expiring at the end of March, reports BusinesssLIVE. The commercially insolvent SA Post Office (Sapo), which has announced a plan to retrench 6 000 employees, continues to struggle with revenues falling below expenses. Year-to-date revenue of R1 9bn is R1.6bn or 46% lower than budget and R590m lower (23%) than the previous year.

Outstanding liabilities amounted to R5.3bn with statutory payments of R2.9bn representing 55% of this amount. Suppliers were threatening court action, MPs were told. 

Denel continued to experience liquidity and solvency challenges leading to it being unable to meet its financial commitments such as guarantee obligations (resulting in government to stepping-in to honour guarantee payments), supplier and salary payments, tax obligations and so on.

‘Denel is insolvent, with reported liabilities in excess of assets to the tune of R1.1bn against the budgeted R406m as at 31 December 2022,’ Treasury said.

‘Due to poor revenue generation, the entity is unable to cover its cost base leading to operational losses.’

Freight rail, ports and logistics company Transnet continued to suffer from inefficiencies.

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