Concerned about the damning financial debt the state-owned enterprise, the South African Airways finds itself, the SA treasury confirms it gave R13 billion as SAA impairment.
The treasury confirmed this payment saying the SAA impairment value was the same as the previous year “due to financial difficulties experienced by SAA.
However, the treasury said the SAA impairment is limited to the total value of the investment, as present value of the expected future cash flows was calculated at R18.8bn.”
According to the Treasury also, the airline had made progress in some areas in its turnaround plan presented at the Parliament in 2014 by the previous board. There, the plan noted a number of improvements made in some areas in the turnaround strategy of the airline.
Having presented its interim results two weeks back signed by the new board headed by Dudu Myeni, the South African Airways (SAA) will be expected to table its final results in Parliament on Friday.
Speaking on the report, auditor general Kimi Makwetu noted the guarantee as material impairments.
Meanwhile, SA Express (SAX) said it could not guarantee its solvency for the year ahead after Public Enterprises Minister Lynne Brown asked Parliament to delay the tabling of its results.
The SAX results were expected to be tabled with those of SAA after President Jacob Zuma announced during his State of the Nation address in February that the two entities would be merged to cut costs and strengthen the balance sheet of the airlines, IoL reported.
The Public Enterprises Minister Lynne Brown further stated in her letter to the parliament on Thursday that SAX was unable to table its results because of solvency issues.
“In terms of the Companies Act, SAX is required to demonstrate its ability to continue operating on a going concern basis for a period of at least 12 months after the signing of the annual financial statements by satisfying the solvency and liquidity test set out in section 4 of the Companies Act,” Brown said.
“SAX has yet to satisfactorily demonstrate such ability to the auditor-general. As a result, the audit cannot be completed in order to finalize the 2015/16 annual financial statements.”
She, however, did not indicate on the possible date for the tabling of the SAX financials in Parliament.