Dreaming of a rainbow Christmas, or a white Christmas or just a Christmas?
The silly season is almost upon us, and from next weeks the roads in Jozi will start to quieten down, while those in the usually quiet seaside hamlets of Cape Town and Durban will become mayhem.
The ruling party has a habit of using this time to release documents for comment, place the population on notice, and generally make use of the quiet time to turn up the temperature under the pot containing us frogs.
I wonder what it will be this year.
One thing that is coming to a head is the debacle surrounding SAA, an insolvent, state owned entity. It requires annual injections of tax cash to keep it able to compete with private enterprise on an unfair basis.
SAA is running with a dysfunctional skeleton board, from which the best uncompromised players have exited in recent years, and more recently. It is unable to put together a quorum to ratify essential negotiated agreements. It is also having difficulties in raising capital, simply because potential lenders don’t trust the government guarantees!
There are existing performance covenants in place with its lenders and suppliers, which it has breached already – it is insolvent to the extent that the most recent financials have not been signed off. Further to this, there exist clauses in the loan agreements, and in a particularly bothersome agreement with Airbus, that if there is any breach with any creditor, then the other creditors can call in their outstandings.
SAA is financially distressed. It cannot pay its debts that are due. It has been placed on terms by Airbus. It has also got an ex parte court order prohibiting the media from publishing a copy of the legal advice it has received from its legal advisors.
SAA should be in business rescue. Any of its creditors can apply for a court order to put it there.
Of course the minister of finance can help it out again by making funds available, but at the cost of something else.
There is some heavy horse trading happening in the background, and I think that something will give over the Christmas period this year. Something which most of us will not care about as we lol around on the white sands of Clifton and Durban.