The SABC could find itself having to apply for business rescue as its finances once again teeter on the brink. CFO Yolande van Biljon has warned that in the worst-case scenario, the broadcaster might have to follow the route of the South African Post Office to avoid liquidation.
If it does, it would be the second institution under the department of communications to approach the court with a business rescue plan.
The broadcaster looks set to announce more than R1bn in losses for the financial year ended March.
In a memorandum dated June 6 to SABC board chair Khathutshelo Ramukumba, Van Biljon rang the alarm bells. A month later it seems the board is yet to intervene.
“The business rescue application that [the Post Office] is currently contemplating is going to become a very real consideration unless other sources of funding or support [are] identified and confirmed as a matter of urgency in the medium to longer term, while in the short term immediate significant interventions that are in the corporation’s control are required,” she wrote in the memorandum.
Van Biljon, whose five-year term was recently extended by six months, wrote to Ramukumba to warn of serious risks to the broadcaster’s financial sustainability and ask for appropriate intervention or guidance.
The memorandum reveals that the SABC’s finance department was asked in May to lead a plan to mitigate or manage “day zero”, and that available cash to settle obligations at the end of May was R60m short despite the corporation not having paid its monthly instalment to Sentech for about a year.
Previously, the SABC described “day zero” as the day it would no longer be able to pay staff salaries. This was one of the reasons it got a R3.2bn bailout from the government in 2019.
Van Biljon wrote that questions around the return on investment of the bailout and turnaround strategy and the financial performance of the corporation have been challenged since the 2023 budget cycle.
“The conversation resumes with the development of the FY24 [financial year 2024] budget and gains emphasis when the first rolled-up budget projects a R1bn loss.
“At the time in early January 2023 an urgent EXCO is called and the situation discussed. The corporate plan for FY24 projected performance and the going concern conversation is linked already at that time, as the forecast loss for FY23, of nearing a R1bn, is a known fact.”
The struggle to pay bills would be a standard theme in the coming months unless urgent interventions were made, Van Biljon warned.
“The going concern risk, and the [auditor-general’s] assessment of the corporation’s response to that risk, is at a crucial stage as the year-end audit is nearing completion,” wrote Van Biljon.
“Leadership is absent currently and there is no cohesion or sense of urgency in the executive team. The corporation is on autopilot.”
Madoda Mxakwe’s five-year term as CEO ended last month.
Leadership is absent currently and there is no cohesion or sense of urgency in the executive team. The corporation is on autopilot
— Yolande van Biljon, SABC CFO
Insiders say the board is yet to act, despite the warning. “It has not given direction up until now. There is no plan on anything from the board … to deal with an intervention,” said an insider.
The board was appointed in mid-April.
The source said: “It has not discussed a strategy as a board. It has not taken a single resolution in writing. Its meetings have been special meetings with no minutes or resolutions produced or any resolution that gives direction.”
President Cyril Ramaphosa delayed the appointment of the new SABC board, leaving it without an accounting authority for six months between mid-October and April this year.
Speaking during a meeting of parliament’s public finance watchdog in March, Mxakwe said the absence of a board was crippling the corporation.
He said business plans geared towards revenue generation that the previous board tasked the management team with had not been approved and this had affected the broadcaster’s financial viability.
The SABC has blamed its financial misfortunes on the analog switch off, load-shedding, economic downturn and the rapid changes in the broadcasting environment. The public broadcaster last recorded a profit in the 2013/2014 financial year where it posted more than R350m in profits.
Mmoni Seapolelo, SABC acting group executive for corporate affairs and marketing, said while board members used the "less than three months" in office to familiarise themselves with the business, they have equally prioritised addressing critical business imperatives.
"The SABC can confirm that due to the urgency of a large number of issues that required board approval in the six months that the corporation did not have a board, a number of special meetings have been convened to deal with those matters."
Seapolelo said the board has engaged the executive management on various key matters relating to the SABC’s viability and decisions and approvals have been made in this regard.
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