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SABC seeks easier loan guarantee terms

Feb 29 2012 12:15 Sapa

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Cape Town - The South African Broadcasting Corporation has asked the government to relax the stringent conditions attached to its R1.4bn loan guarantee, The Times reported on Wednesday.

This emerged in parliament on Tuesday during a briefing on the SABC's performance against the conditions of the government guarantee.

The troubled public broadcaster got a shot in the arm from the Treasury when it faced a cash crisis in 2009 after Finance Minister Pravin Gordhan approved its application for a R1.47bn loan guarantee.

Among the stringent performance-based conditions put in place was that the SABC raise advertising revenue by R535m and sponsorship revenue by R128m.

The SABC was also instructed to trim its R1.5bn salary bill and increase net profits. Although some of the conditions were met, the SABC failed to cut the salary bill and raise revenue.

A task team comprising high-ranking officials from the department of communications, the Treasury, and the SABC told the portfolio committee on ommunications that the broadcaster was projecting a net loss of R92m for the financial year ending in March.

The team also reported that the payments of salaries and other employee benefits would cost R114m more than was budgeted for this year, The Times reported.

The Sowetan reported that the SABC's top management had told the committee it had submitted a "draft proposal for the amendment of the government targets" to the National Treasury because the SABC was beginning to turn the corner.

Acting chief financial officer Lerato Nage could not dislcose details of the "draft proposal" as it would be considered by the Treasury's guarantee certification committee on March 13.

Employing an analogy of how banks deal with financially weak companies, SABC board member Desmond Golding said some of the conditions were proving to be too stringent and inhibitive as they had been agreed to at the time when the SABC was just not able to pay for anything on its own.

"We are not saying that we are running from those particular terms and conditions. But we are saying that given our financial position, we can in fact negotiate better," the Sowetan reported Golding as saying.

 
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