SABC board welcomes R1.4bil bank guarantee

Wednesday, November 25, 2009

Pretoria - Chairperson of the South African Broadcasting Corporation (SABC) Irene Charnley has welcomed the approval of a R1.473 billion bank guarantee.

The guarantee, approved by National Treasury, will be released in tranches, with a draw-down of R1 billion made available immediately.

The remaining R473 million will be released subject to the development of a detailed project plan by the SABC committing itself to explicit revenue targets and cost cutting measures to enable effective oversight and monitoring of projections by government.

Charnley said the granting of the guarantee was evidence of government's commitment to public broadcasting in the country.

She thanked the Minister of Communications Siphiwe Nyanda and Finance Minister Pravin Gordhan for the support they have given the SABC in assisting the corporation in applying for the guarantee.

"The government guarantee, together with the October approval in the Medium Term Budget Policy Statement (MTBPS) of an additional R200 million, will enable the SABC to begin the turnaround to developing a vibrant and viable public broadcasting service responsive to the needs of all South Africans," said Charnley.

At the end of March 2009, the SABC incurred a loss of over R900 million.

The application by the corporation is aimed at both paying back creditors and implementing a turnaround strategy.

"As stated in Parliament the SABC interim board has started the process of identifying cost cutting measures and putting in place governance systems to guard against wasteful expenditure. It will be up to a new board to develop in depth strategies to effect a turnaround," said Charnley.

Government has said it will be ensuring that the money given to the public broadcaster is utilised properly through newly introduced tight control measures that include regular management reports.

Nyanda said in a statement on Tuesday that the SABC was a national asset that needed to be guarded with jealousy by those put in charge of looking after it on behalf of all South Africans.

"We hope that the financial injection by government will help the SABC meet its urgent needs such as payment of outstanding debts and other matters of priority," he said.