Finance Minister Nhlanhla Nene has approved an additional guarantee of R6.488 billion for South African Airways (SAA) taking the total guarantees granted to the airline to R14.4 billion.
The additional guarantee will enable SAA to finalise its annual financial statements for 2013/14, making it possible for the airline to hold its annual general meeting (AGM) next Friday (January 30).
At the conclusion of the AGM, Nene and the airline management will brief the media.
Conditions of the guarantee include: SAA to provide Treasury with a comprehensive implementation plan for the 90-day action plan interventions within a month, including timelines for the targeted savings and which managers are responsible for delivering those savings; review and stress testing jointly by government and SAA of the financial model and refined long-term turnaround strategy (LTTS); SAA to develop proposals within three months on the network structure, fleet strategy and structure of the airline for government’s consideration; SAA to identify areas where it can cut operating costs and how those cuts will be achieved within three months; airline to strengthen governance, internal controls and working capital management, develop an implementation plan in this regard and submit progress reports monthly and submit weekly report to Treasury .
As stated in December the Minister, the board, the acting CEO, and the CFO have agreed that to stabilise the company’s financial position, elements of the long term strategy must be implemented with speed even as the board continues to refine and update the strategy.
In addition, short-term and medium-term milestones have been identified and will form part of the shareholder compact that the Minister of Finance will sign with the board.