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News: Post Office and other state companies ask for R10 billion in bailouts

News: Post Office and other state companies ask for R10 billion in bailouts

A number of state-owned companies have requested billions of rands in funding from the government to help them weather the impact of the coronavirus crisis, National Treasury said in a parliamentary presentation on Tuesday.

Reuters reported that the requested bailout amounts to almost R10 billion, while other state-owned companies have warned of closure if they do not get much-needed funding.

The amounts requested include:

  • The Post Office had requested R4.9 billion in support;
  • The South African Broadcasting Corporation (SABC) is seeking R1.5 billion;
  • Airports company ACSA had applied for an equity injection of R3.5 billion because of the impact of Covid-19;
  • Arms firm Denel faces the risk of entering bankruptcy protection or being liquidated;
  • Power utility Eskom’s financial performance was worse than budgeted for 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 at South Africa’s state-owned enterprises have continued to pile up in 2020, BusinessTech reported.

It is unclear how much funding will be issued to the state firms. South Africa’s economy is forecast to contract at least 7% this year because of the coronavirus crisis and its budget deficit could balloon to as much as 16% of GDP in the current fiscal year.

 


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