Treasury may write down R23bn in crisis-hit SAA

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The Treasury may write down about R23bn of its investment in crisis-hit SAA — almost double the provision it made in 2017, according to a report in Business Day.

In a note to its financial statements for 2017/2018 released on Tuesday, the Treasury said the impairment value had risen because of the R10bn paid to SAA in the last fiscal year.

“While the appointment of a new CEO and a strengthened and credible board are good signals for the market in terms of sound corporate governance,” SAA had indicated it would report net losses for the next three fiscal years through 2020, the Treasury said in its annual report tabled in parliament.

The airline has asked the government for another R21.4bn bailout over the next three years to implement its latest turnaround strategy. In contrast, privately run Comair, which competes with SAA, last week reported the highest after-tax profit of its history.

Public Enterprises Minister Pravin Gordhan notified speaker of the National Assembly Baleka Mbete that SAA, SA Express and Denel would not be tabling their annual financial statements for 2017/2018 by the end of September as required in terms of the Public Finance Management Act. He did not give any reasons, though this may relate to concerns expressed by the auditor-general’s office on the ability of the companies to stay in business.