DA slates SAA bailout, says airline should be liquidated

images 4 1 - DA slates SAA bailout, says airline should be liquidated

The DA says it appears government pressurised the Development Bank of Southern Africa (DBSA) to provide funds to South African Airways because the party does not believe the bank has the mandate to do so.

The DBSA has committed R3.5 billion in emergency funding to the national carrier.

The bank will also give SAA an additional R2 billion, which will be available at a later stage.

The DA’s Alf Lees says he has written to Trade and Industry Ebrahim Patel regarding the details of the deal.

Lees says the party does not believe SAA can be rescued and that the business rescue practitioners should instead apply for liquidation.

“We don’t believe that it falls within their mandate. I mean their mandate is to do due diligence on projects and fund projects that are going to be economically viable and sustainable. This is not such a project and we believe they’ve been put under tremendous pressure by the politicians, presumably the ministers Ebrahim Patel and Pravin Gordhan to make this money available. Legally, they can’t take anymore money directly out of the National Revenue Fund and SAA is gonna keep bleeding and running at massive losses.”

Lees says since December 2019 to date, SAA has lost R2 billion and is therefore running at a loss.

“The airline is more than just financially dead. It’s clients have abandoned it. There’s an obligation on the business rescue practitioners to be completely honest and open about this and accept that the airline cannot be rescued and they should be applying to court for a liquidation.”

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