Broke SABC Given ZAR 2.1 Bn Bailout By Government
Cash-strapped South African Broadcasting Corporation (SABC) is set to receive a ZAR 2.1 Bn capital injection from the government.
The bailout is a part of ZAR 3.2 Bn the public broadcaster was promised by the government earlier.
Stella Ndabeni-Abrahams, Communication’s minister in a press briefing today has made known that the state would transfer the cash injection to the ailing state broadcaster.
“As such ZAR 2.1 Bn will be transferred to the public broadcaster on Monday, 07 October 2019. The remaining balance of ZAR 1.1 Bn will be transferred once the public broadcaster fully meets the remaining three outstanding conditions or firmly demonstrates evidence to fully comply,” said Ndabeni-Abrahams.
While presenting the budget speech in February, finance minister Tito Mboweni mentioned that SABC would be considered for a bailout, which will be disbursed in chunks, subject to several preconditions being met.
The Minister said the state broadcaster has not met all the pre-conditions set by Treasury and once it meets the required conditions, it will receive the remaining portion of the bailout.
SABC had requested for a ZAR 6.8 Bn bailout to pay to implement its turnaround strategy, but the treasury said it would only give the broadcaster an interim relief.
A significant portion of the bailout will go towards settling outstanding debts which is at ZAR 1.3 Bn at the moment, the remaining amount which is below a million will be channeled to assist SABC in aiding the turnaround strategy.
The broadcaster’s cash woes were a result of mismanagement by top executives. In the 2018/19 financial year, SABC reported a loss of ZAR 482.2 Mn.
The broadcaster spends much more than what it earns currently and estimations indicate that it needs over ZAR 600 Mn for its monthly expenses.
The cash-strapped broadcaster has severally expressed worries that it may be unable to pay its employees and even remain on air due to the cash crunch.
SABC is just one of a number of state-owned firms in desperate need of funding. The broadcaster together with other state-owned entities like Eskom and SAA have been dependent on government bailouts to remain afloat.
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