In order to turn around the unprofitable state-owned airline, the finance ministry has put in place new management by replacing six board members of the South African Airways (SAA).
Peoples Bank Ltd. Chairman Johannes Bhekumuzi Magwaza is to replace Dudu Myeni as Chairman while Former Sasol Ltd. executive Nolitha Fakude will replace Tryphosa Ramano as deputy chairperson. Appointed as new non-executive directors are NM Rothschild & Sons South Africa Pty Ltd. CEO, Geoff Rothschild, director of government and international affairs at stock exchange JSE Ltd. Martin Kingston, Ahmed Bassa and Tinyiko Mhlari.
South Africa’s Finance Minister, Malusi Gigaba in a statement said “the new board brings in-depth knowledge of business in both the private and public sectors” without giving reasons for the clear-out.
Myeni who is friends with South African President Jacob Zuma and heads his charitable foundation, have served the board in some capacity since 2009 and was reappointed in September 2016 for another year, alongside 11 other board members.
A member of the opposition Democratic Alliance party and the shadow deputy finance minister, Alf Lees said in an emailed statement that “the chairman has done untold damage to SAA and should not have been reappointed to the board and certainly not as board chair”.
According to Lees “this reported restructuring of the SAA board and the removal of Myeni is far too little, too late to save the airline. There is no saving SAA.”
Though the National airline had received state funds to repay loans in September and has been given until the end of October to settle 5 billion rand ($374 million) of maturing debt to domestic lenders, Credit ratings agencies have said “SAA should be reformed and the cost of propping it up is a threat to South Africa’s credit rating”.
On another note, a group of South African lenders including FirstRand Ltd., Standard Bank Group Ltd., Barclays Africa Group Ltd., Investec Plc. , and Nedbank Group Ltd. are willing to discuss refinancing of debt through March 2019. However, one of their criteria is that SAA appoint a restructuring expert. Ensuring that the criterion set out by the group of lenders is met, the airline is trying to hire British aviation expert Peter Davies.