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Several state-owned companies have requested billions of rand in government funding to help them weather the impact of the coronavirus crisis, the National Treasury said in a parliamentary filing on Tuesday.
Reuters reports that the requested bailout amounts to nearly R10 billion, while other state-owned companies have warned of closure if they do not obtain much-needed funds.
The amounts requested include:
- The post office had requested the aid of 4.9 billion rand;
- The South African Broadcasting Corporation (SABC) is seeking R1.5 billion;
- The airport company ACSA had requested a capital injection of 3.5 billion rand due to the impact of Covid-19;
- Arms firm Denel faces the risk of going into bankruptcy protection or being liquidated;
- The financial performance of electric power company Eskom was worse than budgeted as a result of limited economic activity during the pandemic.
A presentation given by the Department of Public Enterprises at the end of August shows that losses in South African state enterprises have continued to accumulate in 2020.
Diamond mining company Alexkor reported a loss without income-generating activities and the company’s cash reserves are expected to be depleted in September 2020.
Eskom does not generate enough cash to cover its costs and is surviving on government bailouts. Its debt pile is R454 billion, of which R300 billion is guaranteed by the government.
SAA was placed under a corporate bailout in December 2019, due to decreased performance and its inability to pay its debts.
SA Express was placed under corporate bailout in February this year and was subsequently placed in provisional liquidation on April 29, 2020 by the Superior Court. The provisional liquidators have publicized the expression of interest in the sale of the business.
No money to spend
The grim financial data comes after the National Treasury said there are no additional resources available to government departments in the next three years.
Any additional allocations will need to be funded through reductions in other programs, either within the department’s budget or the budget of another department, according to the document submitted by Edgar Sishi, the acting head of the budget office, to the National Office for Economic Development. and work. Tip this week, and seen by Bloomberg.
The Treasury said in a supplemental budget presented in June that it planned to raise an additional R40 billion ($ 2.4 billion) in revenue over the next four years.
The document presented this week shows that it will be composed of R5 billion in 2021-22, R10 billion in 2022-23 and in 2023-24 and R15 billion in 2024-25.
The additional tax measures will be announced in February, according to the filing. Improvements in collection by the revenue service will help and research and analysis on estate taxes is underway, he said.
Read: The government’s stern warning for restaurants breaking lockdown rules
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