State -owned airline SA Express is unable to satisfy the auditor-general that it can meet the solvency and liquidity tests of the Companies Act and that it can continue to operate as a going concern.
Public Enterprises Minister Lynne Brown broke this news to National Assembly Speaker Baleka Mbete.
Brown said she was there fore unable to table the airline’s annual financial statements for this financial year before the deadline today.
SAA was in a similar position for about a year as it waited for the Treasury to grant it a going-concern guarantee ofR4.7-billion, which it did earlier this month.
This brought the airline’s total guarantee to R19-billion.
SA Express is also dependent on state guarantees, which currently amount toR1.1-billion. It required an additional guarantee in the last financial year to fund its working capital and asset-based finance facilities.
The fact that the auditor general was not able to confirm the airline’s going-concern status when he did so in the previous financial year means that its financial situation has deteriorated.
In the previous financial year, the airline made a net loss of R132-million on revenue of R2.6-billion and operating expenses of R2.6-billion.At the end of March last year, SA Express had accumulated losses of R733-millionand its total liabilities exceeded its assets by R126-million.
Brown said in her letter in terms of the Companies Act, “SA Express is required to demonstrate its ability to continue operating on a going concern basis for a period of at least 12 months after the signing of the annual financial statements”.