South African Airways (SAA) is once again facing turbulence, having posted financial losses. Image: Twitter/@flySAA_US
Long-awaited SAA sale cleared for takeoff
The controversial SAA sale of 51% to Takatso is finally cleared for takeoff, assuming the consortium can show government the money.
South African Airways (SAA) is once again facing turbulence, having posted financial losses. Image: Twitter/@flySAA_US
The original SAA sale to the Takatso consortium was brokered back in June 2021. A stumbling block to the sale at the time was that government cover all historic liabilities. However, according to a report which appeared on Engineering News, SAA chair Derek Hanekom has told Parliament this week it’s no longer an issue.
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R1-billion was provided by Treasury and a further R1.5-billion has been requested to refund un-flown tickets. However, when asked whether the SAA sale to Takatso would finally happen, Hanekom said he was not in a position to answer that. Takatso is a consortium of Harith General Partners (HGP) and Global Aviation.
SHOW ME THE MONEY
The National Treasury has now asked Takatso to show proof of funds for the deal to go ahead. The latest delays to finalising the transaction were not funding-related and had arisen due to the exit of Global from the Takatso consortium due to concerns by the Competition Tribunal of a conflict of interest.
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SAA CEO John Lamola said that although SAA was now profitable, it would still need external capital to expand and be sustainable. He said SAA needs external funding and it can only come from a strategic equity partner – whether that be Takatso or someone else. Minister of Public Enterprises Pravin Gordhan announced the 51% SAA sale back in June 2021, undertaking to make an equity injection of R3 billion over three years with a shareholder loan.
SAA SALE VALUATION HAS LAPSED
It’s been a long time since the SAA sale deal and the original valuation of the business has since lapsed. Because a new valuation is in process, this will likely impact the price Takatso will eventually pay.
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