(Bloomberg) – South Africa has identified three equity partners for the country’s bankrupt state-owned airline and will make a decision on which to pick “next month or so,” according to Minister for Public Enterprises Pravin Gordhan.
South African Airways’ interim board is looking into the candidates before the government makes its recommendation, the minister said in an interview with Bloomberg TV on Friday. He also believes the national utility debt of Rand 464 billion ($ 31.6 billion) will be “a thing of the past” in the next three to five years.
Finding a private-sector facility to keep SAA safe is key to the minister’s plan to revive the airline that has been in management for more than a year and has not flown commercially since March. The airline is also in a legal battle with unions over worker reimbursement as demand for air travel has slowed to a minimum amid the Covid-19 pandemic.
The Department of Public Enterprises is responsible for the government’s various state-owned corporations, many of which are making losses and have required significant bailouts to stay afloat. Eskom Holdings SOC Ltd., the monopoly of power, is seen as the greatest liability due to its financial situation and the frequent need to trigger rolling power outages.
South African President Cyril Ramaphosa on Thursday highlighted Eskom’s revival as a central aspect of the nation’s recovery from the coronavirus crisis. While he outlined measures to be taken this year in sourcing electricity from independent producers to bolster the power grid, there were no details on a much-anticipated solution to the utility’s chronic mountain of debt.
“The general direction in terms of debt location will be known in the next three to five months, and it won’t necessarily be a tax burden – there could be more creative ways of finding solutions,” Gordhan said.
Andre de Ruyter, Eskom’s Chief Executive Officer, has identified green funding as a potential avenue to improve repayment terms for the transition from coal to renewable and clean energy generation.