Posts tagged with 'bailout'

 

State-owned bus company seeks R350 million bailout

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The state-owned bus company Northwest Transport Investments, which transports more than a million people a day, is seeking a bailout of R350 million.

The transportation of hundreds of thousands of commuters mainly in the North West and Gauteng provinces and more than 1,600 jobs are at risk due to the financial distress of parastatal Northwest Transport Investments (NTI).

The 46-year-old company – which owns Northwest Star, the Star Line, and the Atteridgeville Bus Service – has applied to the North West government (its sole shareholder) for a bailout of more than R350 million, NTI chairman, Mojalefa Nale, confirmed to Business Insider SA. The company has outstanding debts of about equal to that amount.

In August, a high court judge placed the company into provisional liquidation, after an application from Driveshaft Baleka, which is a Pretoria-based company that rebuilds and manufacturers propeller shafts.

It was owed R890,000 b
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Government employees face 10% salary cut to fund crippling Eskom since National Treasury’s box is empty

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National Treasury director-general Dondo Mogajane has said that the best way to fund the bailout of failing state-owned enterprises could be to cut the salaries of all government employees by 10%, according to a report in the City Press.

The government has to find a way to close a R120-billion hole in its budget, which is the result of acceding to a R59-billion bailout for Eskom as well as a shortfall in tax revenue for the fiscal year ended March 2020.

“National Treasury’s box is empty,” Mogajane said to the City Press.

“Growth is not coming through and tax revenues are not there. We are in trouble. The government needs to reduce spending.”

“If we are going to be serious – without people losing their jobs – let us reduce the salaries and stop the bonuses,” Mogajane said.

In response to this plan, unions said that they would not accept the revocation of bonuses and salary cuts for their workers.

“Any talk
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Cash strapped Denel asks ANC regime for cash injection of R2.8 billion to pay employees salaries and remuneration

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Weapon manufacturer Denel is one of several state-owned enterprises (SOEs) found amid allegations of corruption and statecapture. The entity finds itself in a deep financial crisis and was forced to ask government for a R2.8 billion bailout to pay suppliers and outstanding salaries.

Public Enterprises Minister Pravin Gordhan announced that the company, with the help of a lender, made it possible to pay salaries for the month of June. Meanwhile, it has come to light that although staff salaries have been paid, no pension contributions where paid. Unconfirmed reports say Denel will again struggle in late July to compensate his staff.

Denel CEO Danie du Toit indicated stated that Denel is in negotiating with the banks to obtain bridging finance and has apologized for the tension and anxiety it causes among staff and their families. Since Denel failed to pay its employees ‘salaries in full, staff have been showing a negative attitude towards the comp
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Parasite SEO Eskom, paralysing SA as the country is running out of money; unless considered action is taken, not just talk – South Africa remains standing at the brink of destruction

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When Finance Minister Tito Mboweni on Tuesday told MPs government would have to review its funding requirements, he put into financial jargon that, actually, South Africa’s running out of money. And Eskom is to blame, in the main.

Bluntly put, Tuesday’s Special Appropriation Bill is scraping together R59-billion extra for Eskom — that’s in addition to the R23-billion a year already announced in February’s Budget — to ensure the power utility keeps its lights on.

The bailout timing is crucial — a week to the day before Eskom releases its financial results. Twice delayed already, it’s now on public record the power utility wasn’t a going concern; effectively bankrupt, it can’t meet its obligations under its own steam. The Special Appropriation Bill’s proposed R59-billion bailout over two years has ensured the auditors, on the back of such an official guarantee, can now sign off on the Eskom financials.

“Eskom’s funding pl
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State Treasury plundering continues – your tax money will fund Eskom with a further R59bn

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Eskom will receive a further R59bn bailout over two years from the government to keep the bankrupt power provider standing.

This follows the R69 billion already approved for a three-year period. Eskom’s debt currently amounts to R440bn and is considered the biggest risk to the South African economy.

How much money is still to be deposited in the entity is not known, but economic experts agree that Eskom will never get rid of the debt itself.

-Vryburger / 2019-07-23
This report does not necessarily reflects the opinion of SA-news.

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Funds allocated to Prasa will now be used to bailout failed Sanral e-toll systems

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The “state” is presenting new legislation which will mean that funds allocated to Prasa will be transferred to bailout the failed Sanral e-toll system.

R2 billion is allegedly involved in the transfer after R 3 billion of Prasa money was already transferred to Sanral in 2018.

Transport economists believe this is a step in the wrong direction as the rail transport network urgently needs money to improve the outdated infrastructure so that rail transport can once again take its rightful place in the South African transport system and alleviate the pressure on roads.

-Read the original article in Afrikaans on Vryburger
This report does not necessarily reflects the opinion of SA-news

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SA faces rating crisis due to ANC-controlled Eskom’s gross debt of more than R440bn – How will Ramaphosa overcome this problem without abusing public funds?

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Despite the R230 billion bailout the ANC president promised to Eskom over the next ten years, they are now asking the government for further assistance.

At this stage, it appears that the government is going to trade Eskom’s debt for government bonds or through the creation of a special account.

According to the Treasury, the problem at Eskom is “big and complex” which leads to the country’s rating crisis. President Ramaphosa has on several occasions tried to appease the rating agencies with a “workable” plan without abusing public funds.

Eskom’s debt at the end of March amounted to R440 billion, and considering that the country’s total gross domestic product amounted to $ 366 billion in 2018, it shows how serious the crisis is.

-Read the original article in Afrikaans on Vryburger
This report does not necessarily reflect the opinion of SA news.

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ANC regime is going to throw more money funded by taxpayers into the bottomless pit of Eskom, amounts are unknown

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Amidst many promises and assurances before the general election, the lies have triumphed again, as Eskom seems to be getting more money from the government.

Stubborn reports indicate that an Eskom delegation has visited the ANC’s president, Cyril Ramaphosa, and some of his cabinet members, and talks have been held in Genadendal.

Unconfirmed reports state that Ramaphosa has over-emphasized the importance of Eskom for the umpteenth time, as if alternative solutions do not exist.

Eskom has already splurged billions of rand, a large part of which “has landed in the sewer ditch”, and with the unprecedented and unfair tariff increases approved, it remains inexplicable to taxpayers why the government is again willing to put money into Eskom’s bottomless pit.

Although amounts are not mentioned, the ANC precedent confirmed that further assistance to the power provider was in principle approved.

-Read the original art
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SABC a sinking ship in a tide of debt – Need R3.2bn bailout to stay afloat

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Faced with an unenviable choice last month – either cough up to service its eight-figure municipality account, or settle the salary bill, the SABC took the high road and paid its staff.

And while the lights are still on in Auckland Park, for now, anyway, the broadcaster is desperately hoping a R3.2bn government guarantee will entice commercial banks to provide the loans it needs to stay afloat.

“I’m not sure how we are going to pay for salaries come end of June,” SABC board chair Bongumusa Makhathini told the Sunday Times this week. “We have also not maintained any of our infrastructure and a communication blackout is imminent. We anticipated Day Zero in March, but we have managed to stay on air until now.” The SABC will meet with the municipality this week to discuss its debt.

The financial position of the SABC has been worsening over the last nine months and the public broadcaster is at the mercy of its creditors as it awaits a
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How much taxpayers money has been thrown into SAA’s black hole to stay afloat?

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Billions and billions have been thrown at The South African Airways (SAA), but the airline don’t have much to show for it. It’s hard to recall a time when the limpest of all our state-owned entities was successful on its own two feet.  It has a history of relying on fiscal interventions, needing contributions from both private firms and the taxpayer just to stay airborne.  Over the last 20 years, their borrowing has been obscene, merely a few days ago the board has requested yet another  additional R4 billion to stay afloat this financial year.

According to a SAA spokesperson the company requested the R4 billion bailout as it has been operating at a loss since 2011. The entity needs has approximately R450 million a month  to keep operations running. The airline’s generated revenue of R30.4bn in 2016-17 while operating costs amounted to R30.9bn. Finance costs totalled R835m and the operating loss was R533m. The losses have continued into
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Economic recession awaits SA due to poor performance of the rand and begging mentality of state entities

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South Africa’s economy is plunging into an abyss, and the recession looms on the doorstep of SA’s door.

This is the opinion of an expert in Pretoria following the extremely poor performance of the rand and the begging mentality of state-controlled companies.

The latest plea from the SA Airways, asking the ANC-regime for a R4 billion bailout, will put the country in a recession, if granted, and will force Moody to downgrade the country to junk status.

Economists warn that SA Airways will not rise from its financial difficulties even if a bailout is received, and will eventually have to be sold due to mismanagement by incompetent chief officers appointed.

-Read the original article in Afrikaans on Die Vryburger
This report does not necessarily reflects the opinion of SA-news.

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SA taxpayers to fund yet another government bailout – Cash-strapped SAA requests R4bn to survive current financial year after years of mismanagement and corruption

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South African Airways (SAA) appointed its head of operations as acting chief executive on Friday and said it needs R4-billion from the government to survive the current financial year and allow it to renegotiate loan terms with banks.

Zukisa Ramasia becomes interim CEO after Vuyani Jarana unexpectedly resigned on Sunday, after less than two years in the job, saying his turnaround strategy for the loss-making airline was being undermined by a lack of state funding and too much bureaucracy.

SAA has not made a profit since 2011 and Jacana launched a five-year turnaround plan that includes slashing costs and cancelling unprofitable routes, requiring around R21.7-billion in cash injections from the government.

“We are currently operating at a loss and that is the background to the request we’ve made for R4-billion of support for the current financial year,” board member Martin Kingston told a news briefing.

“We are in d
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