Africa-Press – South-Africa. A number of prospective investors have expressed an interest in buying a stake in Airports Company SA (ACSA), but the state-owned entity, which runs the country’s main airports, is not for sale, according to Transport Minister Fikile Mbalula.
“ACSA is not only a strategic national asset with an important role to play in South Africa’s economic reconstruction and recovery, but also in enabling the growth of the aviation sector in Africa,” Mbalula said in a statement on Friday.
“It is on this basis that the government has no intention to divest the equity it holds in ACSA, in favour of private shareholding in the foreseeable future.”
Government owns a 74.6% stake in ACSA and the Public Investment Corporation holds 20%. The rest is held by a number of private investor groups.
“While it is true that ACSA has been severely impacted by the Covid-19 pandemic as a result of travel restrictions, it remains on course on the recovery path,” said Mbalula.
“We will continue to engage with investors with a view to direct these investments to projects that we believe will add appropriate value to our service delivery mandate across the sector, and not equity. The aviation sector has massive potential for investment and we encourage investors to take advantage of the opportunities it presents.”
A source familiar with ACSA told Fin24 that the statement by Mbalula is likely in reaction to recent comments made by billionaire Rob Hersov. He told The Nielsen Network that he sees untapped value in six regional ACSA airports.
Nick Ferguson, Hersov’s partner in RSA.aero, confirmed to Fin24 on Friday that they had expressed a verbal offer about two months ago to buy a controlling stake in six regional ACSA airports. These are George, Gqeberha, East London, Bloemfontein, Kimberley and Upington. The idea is for ACSA to remain a minority stakeholder in these smaller airports.
ACSA referred them to the Department of Transport, which in turn referred them back to ACSA. The proposal was also put to Minister Mbalula.
“We never proposed buying a stake in ACSA. We are only interested in buying a controlling share in the six regional airports. These regional airports represent less than 10% of air traffic and passengers at all ACSA airports and historically have made losses every year,” says Ferguson.
“At some stage ACSA would need to realise these airports are not financially feasible to them and they are doing a disservice to the South African community as the activity levels at these airports have been declining annually even before the pandemic.”
RSA.aero, which owns the Cape Winelands Airport on the outskirts of Cape Town, believes it takes a different type of skill to manage these regional airports and unlock their value.
“We will go through a formal bidding process. We believe we have a unique offering. After all, President Cyril Ramaphosa has indicated in the past that he sees the value in public-private partnerships,” says Ferguson.
Minority shareholder frustration
In April this year the Supreme Court of Appeal (SCA) dealt a blow to minority shareholders in ACSA, ruling against them in a drawn-out legal battle over shares they purchased in 1998. The ruling set aside a settlement agreement which was initiated by ACSA and the Department of Transport. However, the issue of whether the minorities have been oppressed has not yet been decided by the courts.
The minority shareholders, which include Old Mutual-controlled Futuregrowth and other parties, claim they were expecting to be able to sell their shares once the company was listed on the JSE – but this never occurred. They are also unhappy because they say they have not been able to get fair value for their shares from ACSA.
ACSA is set to announce its financial results for the year ended March 2022 next week.
For More News And Analysis About South-Africa Follow Africa-Press
