Commercial banks voted in favour of a plan that will cost the taxpayer at least R10.3bn more
On July 14 the public enterprises minister pulled off the perfect heist. SAA will once again be bailed out with taxpayers’ money, co-funded by hapless concurrent creditors of SAA.
Gordhan was abetted by the commercial banks and aircraft lessors. The latter, as with labour, were bought off by settlements that went beyond the remit of applicable legislation. Commercial banks held 71% of the available vote, aircraft lessors 8%, state-owned entity creditors 2% and SAA employees 2%. Truly independent concurrent creditors held 17% of the available vote, which provides perspective on the 14% that voted against the purported plan.
Commercial banks had no skin in the game — their payment was guaranteed by taxpayers — and instead of showing some resolve they voted in favour of a plan that will cost the taxpayer at least another R10.3bn before the inevitable trading losses that will continue into the foreseeable future. The plan provides for at least R6bn in trading losses during the first three years, so you can keep on counting.
The trade-off can only be future business with the state guaranteed by the taxpayers — it’s easy business and it pays. The plan indicates that the banks will earn R1.9bn in interest payments for taking no risks whatsoever.Gordhan got what he wanted, but let’s not lose focus on the big prize in this heist. SAA will return all its leased aircraft to lessors in terms of the plan and acquire/lease a new fleet of aircraft after rescue without delay. As Gordhan used to remind us, “connect the dots”.
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