SABC Needs $220 Million Government Backing to Avoid Shutdown

(Bloomberg) -- The South African government is considering a 3.2 billion rand ($220 million) guarantee for the country’s cash-strapped national broadcaster to help it raise money from lenders, according to the Sunday Times.

The broadcaster is saddled with large debts to the municipality, signal distributors and Pay TV business Multichoice, the newspaper reported, citing the chairman of South African Broadcasting Corp., Bongumusa Makhathini.

“We have also not maintained any of our infrastructure and a communications blackout is imminent,” Makhathini was quoted as saying. The board is in the process of a "cleanup" including a number of probes by the country’s Special Investigative Unit and an internal audit, he said.

The SABC is one of a number of state-owned companies in dire need of financing, with power utility Eskom straining under a $30 billion debt pile, and South African Airways also needing to repay debts. The National Treasury is being pressured to provide guarantees and bailouts to these businesses.

The crises have come to a head following nine years of alleged looting and mismanagement of government businesses under President Jacob Zuma. Zuma denies any wrongdoing.

The SABC’s chief auditing executive, Thami Zikode, recently survived an alleged assassination attempt that Makhatini linked to the cleanup at the broadcaster, where 180 people have been implicated in wrongdoings.

To contact the reporter on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Amy Teibel, Namitha Jagadeesh

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