South African Express (EXY, Johannesburg O.R. Tambo) could ask the South African Treasury for additional financial assistance following reports it has been unable to secure a going-concern status given the current state of its accounts.
According to parliamentary documents released by South Africa's opposition Democratic Alliance party, the government-owned carrier said it could not, at present, table its final accounts as it had yet to satisfy the solvency and liquidity test.
"In terms of the Companies Act No. 71 of 2008, 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 by satisfying the solvency and liquidity test set out in section 4 of the Companies Act," Public Enterprises Minister Lynne Brown said in a letter to Parliament. "SA Express has yet to satisfactorily demonstrate such ability to the Auditor-General. As a result the audit cannot be completed in order to finalise the 2015/16 annual financial statements.”
South African Express was granted a total guarantee of ZAR1.1 billion from the South African government in February 2015 of which ZAR567 million was used to secure its going-concern status. The remaining ZAR539 million was part of an 2013 guarantee needed to cover the terms of various debt covenants.
Last month, sister carrier South African Airways (SA, Johannesburg O.R. Tambo) was granted a ZAR5 billion (USD351 million) state-backed guarantee, necessary for its to finalize its own accounts, after it met several preconditions laid down by the Ministry of Finance, one of which was the constitution of a viable board.
