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Local banks demand R5bn from SAA, unless Gigaba gives another bailout

Ockie

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#1
Cape Town – Embattled national carrier South African Airways (SAA) needs to honour another R5bn debt obligation – this time to local lenders – by the end of October 2017.

In a report to Parliament, Finance Minister Malusi Gigaba said local lenders may be willing to extend the deadline beyond the end of October to end-March 2019 on condition that he announces an equity injection into SAA when he tables the medium term budget policy statement (MTBPS) on October 25.

However, the equity injection needs to be approved by Parliament in terms of the Public Finance Management Act (PFMA) before it can take effect, which means the legislator will have six days to do so before the end of October.

Alf Lees, Democratic Alliance (DA) spokesperson on SAA, said it is clear that Gigaba “has dug himself into a hole with SAA”.

“It is not practically and legally possible for parliament to approve an appropriation bill by the 31st of October and so the conclusion must be that Malusi Gigaba has informed the banks and other domestic lenders that parliament will indeed approve the equity injection at some date after the end of October..............................
http://www.fin24.com/Companies/Indu...-unless-gigaba-gives-another-bailout-20171012
 

ForceFate

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#2
SAA needs restructuring; top to bottom. Else, all of this is going to blow up spectacularly later, with outcomes far worse than if they bite the bullet and restructure now. Perhaps they should start by removing dead wood perched on top.
 

NarrowBandFtw

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#5
These banks should have a quick meeting among themselves and then go to the courts, have R5bn worth of assets of SAA attached and we can all finally get rid of SAA...
That and also stop fishing for or even accepting pledges by the finance minister. I get that they're private enterprises looking to recover their money, but for the good of South Africa, and their brands, they stopped doing business with the Guptas. They need to also stop accepting additional tax payer money for SAA's debt repayments!
 

krycor

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#9
SAA needs restructuring; top to bottom. Else, all of this is going to blow up spectacularly later, with outcomes far worse than if they bite the bullet and restructure now. Perhaps they should start by removing dead wood perched on top.
I think the Banks are trying desperately force government to kick Zumba’s GF out. Why this was not a precondition is a bit odd but I guess a direct attack would have resulted in harsher conditions for them. Ie they playing the political game skillfully without showing to take sides imo.

Pushing it back to parliament means the oversight committees will, hopefully, have explain why they approve and the chairperson and her dodgy position sitting will again come to the foreground of debate. Not that it’s help with SABC where in Zuma just refuses to sign off.
 

Ockie

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#10
SAA GIVEN BRIEF REPRIEVE ON DEBT

CAPE TOWN - South Africa's state-owned airline SAA has been given until the end of October to settle R5 billion of maturing debt to domestic lenders, although the relief may be extended a further two years, Finance Minister Malusi Gigaba said in a report to Parliament on Friday.
What I do not understand is this:

Last month, Treasury spokesperson Mayihlome Tshwete said the money was not a loan that is repayable because the government expects the airline to become profitable in future.
Surely if a business that you gave money to which was struggling financially turns profitable, you are going to want your money back at least? Not to mention potential interest on that money? :confused:
 

ForceFate

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#11
What I do not understand is this:



Surely if a business that you gave money to which was struggling financially turns profitable, you are going to want your money back at least? Not to mention potential interest on that money? :confused:
Mayihlome knows very well that SAA would not, for the forseeable future, be in a position to repay the loan.
 

Ockie

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#12
Mayihlome knows very well that SAA would not, for the forseeable future, be in a position to repay the loan.
I am sure that is the case, but then surely, you would say in the interest of at least "trying" to get the trust of the populace from whom you get your money via taxes that soon as SAA starts turning a profit, the money will start flowing back into the treasure chest, therefore it is the government's main aim to turn the airline around as quickly and efficiently for that to happen? This guy is not even TRYING to sugar coat a turd! :wtf:
 

Techne

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Sep 28, 2008
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#14
These banks should have a quick meeting among themselves and then go to the courts, have R5bn worth of assets of SAA attached and we can all finally get rid of SAA...
Wait, so the banks generate money out of thin air in the form of debt and when someone cant pay them back they get the real assets... Nah, screw them, let them both fail and give the assets to taxpayers.
 
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Kosmik

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#17
Wait, so the banks generate money out of thin air in the form of debt and when someone cant pay them back they get the real assets... Nah, screw them, let them both fail and give the assets to taxpayers.
No, for debt to exist money has to have been loaned. You think money grows on trees?
 

Techne

Executive Member
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9,273
#19
No, for debt to exist money has to have been loaned. You think money grows on trees?
Not trees, but thin air. Money is magically generated out of thin air from the fractional reserve banking system. And then paid back at interest. Nice ponzi scheme.
 
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