Ramaphosa defends govt’s decision to pump billions into recapitalising SAA

Deputy president Cyril Ramaphosa says the govt had no option but to pump billions into recapitalising South African Airways because letting it fail would have catastrophic consequences for the economy. Ramaphosa was challenged over why the govt was throwing good money after bad to keep the airline afloat. Ramaphosa explained that the govt is the guarantor of last resort for the debt carried not only by SAA but a number of state-owned enterprises. “Now if SAA were to default, that defaulting would run right across other govt guarantees. Govt has given, not only to SAA, to Transnet, to Eskom, to Prasa and a number of other govt-owned entities” It would mean the govt would have to repay that debt in one go, with further impact on the bonds it has issued. <br/>