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SA is close to picking airline partner, Gordhan says

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Public Enterprises Minister Pravin Gordhan.
Public Enterprises Minister Pravin Gordhan.
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South Africa has identified three equity partners for the country's bankrupt state airline and will make a decision on which one to pick in "the next month or so," according to Public Enterprises Minister Pravin Gordhan.

The interim board of South African Airways (SAA) is engaging with the candidates before the government makes its recommendation, Gordhan said in an interview with Bloomberg TV on Friday.

He also expects Eskom's R464 billion debt to become "a thing of the past" in the next three to five years.

The search for a private-sector entity to help steer SAA to safety is key to the minister's plan to revive the airline, which has been in administration for more than a year and hasn't flown commercially since March. The carrier is also in a legal dispute with unions over back-pay settlements to workers, while demand for air travel has slowed to a trickle amid the Covid-19 pandemic.

The Department of Public Enterprises is responsible for the government's various state-owned enterprises, many of which are loss-making and have required substantial bailouts to stay afloat. Eskom is regarded as the biggest liability due to its financial situation and frequent need to trigger rolling blackouts.

President Cyril Ramaphosa on Thursday highlighted the revival of Eskom as a central aspect of the nation's recovery from the coronavirus crisis. While he outlined measures to be taken this year in procuring generation from independent producers to bolster the power grid, there were no details on a much-anticipated solution to the utility's chronic debt pile.

"The broad direction will be known in the next three to five months in terms of where the debt goes and it won't necessarily be a burden on the fiscus - there might be more creative ways of finding solutions," Gordhan said.

Eskom chief executive officer André de Ruyter has cited green financing as a potential way to improve the debt-repayment terms as the utility transitions from coal to renewable and cleaner-energy generation.

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