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South Africa is considering an independent board for its ailing national airline, with a shareholder structure similar to that of part state-owned telecoms firm Telkom, a senior government minister told the local eNCA news channel on Sunday.
Debt-ridden South African Airways (SAA) has been in a form of bankruptcy protection since December. Its creditors approved a rescue plan last week that involves scaling down its fleet, shedding thousands of jobs and a commitment of over 10 billion rand ($599.6 million) from the government
“Telkom is an interesting model that we could actually look at as we go forward,” Public Enterprises Minister Pravin Gordhan said, adding that the new SAA cannot be run by a “bunch of amateurs.”
He did not specify if the revamped airline will be a listed entity.
Telkom SA , among the top three telecom service providers in Africa’s most industrialised country, is run independently and not bound by government guidelines set up for most South African sate-owned enterprises.
The government directly holds a 37% stake in the listed entity and state-owned fund manager Public Investment Corp. owns around 15%. The rest is owned by institutional investors and the public.
Gordhan said the government was still trying to secure the 10 billion rand required for the business rescue plan to succeed. “Now where it comes from, what form it comes in is something is still being worked on.”
The public and finance ministries committed to finding the funds in a letter to the airline’s administrators seen by Reuters last Thursday. This is in addition to more than 16 billion rand the finance ministry set aside in its February budget to repay SAA’s guaranteed debt and debt-service costs.
He reiterated that the restructured airline will have a strategic partner, professional aviation managers and a more simplified salary structure.
(Reporting by Promit Mukherjee; editing by Emelia Sithole-Matarise)