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SABC needs urgent R3bn loan but its future depends on other SOEs

2019-06-24 00:00

With R1.3 billion debt, the broadcaster needs an urgent R3 billion loan to keep operating and retain jobs.

The board of the financially destitute SABC met with Communications Minister Stella Ndabeni-Abrahams in Cape Town on Friday, but sources say the public broadcaster still has no confirmation on exactly when it can expect a loan guarantee from government.

With debt standing at R1.3 billion after its coffers were plundered by its former bosses, the SABC has requested a R3.2 billion bank guarantee from the state.

Although they have found themselves in conflict with the minister in the past, the meeting was described as “just regular” and “pretty positive” by one source.

The meeting was confirmed by communications department spokesperson Nthabeleng Mokitimi-Dlamini, who described it as “a bilateral meeting, as with any other entity within the portfolio, to discuss various strategic matters”.

Sources say there were inevitable discussions about the pending “day zero” described by chief financial officer Yolande van Biljon in an interview early last week, eliciting fears that the SABC will be forced off air if help doesn’t arrive soon.

But sources attending various other high-level meetings at the SABC last week said it had become clear that the guarantee was dependent on broader negotiations involving other state-owned enterprises (SOEs).

According to communication sent to members of the Broadcasting, Electronic, Media & Allied Workers Union (Bemawu) after a meeting on Thursday with SABC chief executive Madoda Mxakwe and Van Biljon, “the delay in obtaining the government guarantee seems to be because the SABC is part of a collective of SOEs asking for a government guarantee/bailout”.

Sources told City Press that the finance department was negotiating with two prominent commercial banks to process collective funding.

The department did not respond to queries last week.

Sources close to the board said the broadcaster may need to wait until October for the medium-term budget policy statement for relief.

The sources said the SABC was able to pay salaries for at least two months – unless one of its other creditors decides it has had enough.

The City of Johannesburg and distribution network provider Sentech, as well as independent television producers, are high on the list of those suffering because of unpaid bills.

“The SABC’s creditors are effectively subsidising the broadcaster at this stage,” said a senior source.

According to Van Biljon, the SABC owes R317 million to SuperSport and R208 million to Sentech.

City Press believes that independent producers are owed R195 million.

“If SuperSport or Sentech say they are unable to carry us further, then the salaries will be at risk. It is indeed crunch time, but we are doing everything we can to protect the payroll,” said Van Biljon.

Managers at the SABC have frequently spoken about their concern that a creditor would implement liquidation action against the broadcaster.

If that happened, it would not survive.

It is believed that the SABC needs R600 million a month to operate, of which R260 million is used for salaries.

The memo to Bemawu members stated that Van Biljon “also informed the meeting that the SABC is looking into operations, including the ‘rightsizing’ of the SABC”.

The broadcaster, which found itself in conflict with Ndabeni-Abrahams when it announced plans for mass retrenchments, has put its job shedding plans on ice, but may need to return to them if a guarantee is not forthcoming.

The SABC would neither confirm nor deny that it had let go of about 1 000 staff, mostly by not renewing contracts and also by executing several dismissals for misconduct since its financial crisis hit nine months ago.

Mokitimi-Dlamini told City Press: “The department’s position is that the public broadcaster must explore all possible options to turn around the organisation and that retrenchments must be the last resort. The departmental task team and the Government Technical Advisory Centre are further supporting the SABC to develop a turnaround plan that will enable the public broadcaster to be responsive and remain relevant in the competitive and changing broadcasting landscape.”

SABC spokesperson Vuyo Mthembu said: “The SABC reiterates that it has submitted all relevant documentation regarding its funding request to the minister. The SABC has been working closely with the department of communications and National Treasury in this regard. The SABC is not in a position to comment further”.


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September 15 2019