State-owned enterprises (SOEs) that are bleeding money could see some restructuring ahead, according to the 2013 Budget, tabled by Finance Minister Pravin Gordhan on Wednesday.<\/p>\n
These include the cash-strapped SA Airways (SAA), SA Broadcasting Corporation, SA Xpress, Denel and the SA Post Office.<\/p>\n
“During 2011\/12, (the) Airports Company [of South Africa] and Eskom recorded profits, but SAA, Alexkor and Armscor lost money.”<\/p>\n
The losses have been attributed to policy uncertainty, costs associated with non-commercial activities, operational inefficiencies and management instability.<\/p>\n
Government, as the main shareholder in SOEs, as well as the company boards, were not co-ordinating adequately.<\/p>\n
“Over time, the equity of entities that persistently lose money is gradually eroded, which eventually requires that they be recapitalised.”<\/p>\n
This meant government would have to work with the entities to develop turnaround strategies, which would include “some form of restructuring”.<\/p>\n
SAA has been mired in controversy for years, following bailouts by government, as well as the hiring, firing and resignation of CEOs and board members.<\/p>\n
Treasury granted the loss-making company a R5 billion guarantee in October last year, enabling it to borrow money to buy new aircraft.<\/p>\n
This was preceded by the resignation of some board members, including chairwoman Cheryl Carolus.<\/p>\n
Earlier this year, acting CEO Vuyisile Kona was suspended after the troubled airline’s board cited “allegations” it was investigating.<\/p>\n
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