SAA, Post Office to get cash lifts

Gordhan has promised a capital injection to SAA and the Post Office, but is yet to say how much and where the money will come from, according to a Business Day report. Speaking at a media briefing before delivering his budget speech yesterday, Gordhan said SAA had strong prospects for a turnaround if the new board did the right things and appointed a new CEO and chief financial officer. ‘We will make the equity injection SAA needs, but I can’t say yet where the equity injection will come from,’ he said. Treasury DG Lungisa Fuzile said that Treasury was ‘resolute’ that the capital injection would be financed in ‘a deficit-neutral way’. This would mean that government would either have to dispose of another asset to raise the funds or acquire an equity partner. ‘Both SAA and the Post Office need new capital. We recapitalised the Post Office with R650m last year, but more might be needed. SAA definitely needs a capital injection which could be substantial, suffice to say, in the current environment, it would have to be made in instalments over time. The first cash injection will be in this coming financial year,’ he said. Gordhan said he had met the new board of SAA last week and felt confident that it had a good grip on the business of the airline.