South African Airways (SAA) is technically insolvent and will not be able to meet its financial obligations without government support.
This is despite it being optimistic that it is beginning to turn itself around and becoming profitable again.
Parliament is currently processing the SAA Special Appropriation Bill that will result in the entity receiving R5 billion from the Fiscus.
Head of Asset and Liability Management Anthony Julies says, “If you look at the balance sheets – this is basically looking at the state of its assets and its liabilities – you will find a similar picture. It is essentially technically insolvent, where the liabilities of the entity exceeds the assets and the shareholder the value is essentially negative.”