Africa-Press – South-Africa. Cape Town – Efficient Group economist Dawie Roodt says while the announcement of the 51% sale of South African Airways (SAA) is welcomed, he believes government should have sold the entire entity.
Public Enterprises Minister Pravin Gordhan on Friday announced that Takatso Consortium will acquire a 51% stake in SAA, while government will keep 49% shareholding in the new airline.
Gordhan said Takatso would inject more than R3 billion into the deal.
This comes after SAA has been in business rescue since December 2019 and business rescue practitioners ended the process two months ago.
According to Roodt, much more detail must be provided as Mango, which is a subsidiary of the airline, could also be affected.
“In principle, I’m absolutely in favour of this … the only criticism that I have is that the state is still keeping 49% when they should’ve sold all of it. But the question is, are they (the consortium) coming in with new money?
“If you buy SAA, my understanding is that Mango is part of the deal as well, however, I’m not sure about what the details are,” said Roodt.
He noted that he has a few concerns about the sale.
“Something that I’d like to know much more about is where will the consortium get the money? Will it be actual new money coming in or will it be money coming from, for example, an institution such as the Public Investment Corporation (PIC)? There are rumours doing the rounds that the money will come from the PIC,” said Roodt.
Public Enterprises Minister Pravin Gordhan said the selection of the consortium is a groundbreaking decision for the government.
“The partnership brings together South African public and private sector capabilities to reposition SAA. We have looked long and hard at the proposals submitted, and our clear choice of a preferred partner is the Takatso Consortium. The objective of bringing in an equity partner to SAA is to augment it with the required technical, financial and operational expertise to ensure a sustainable, agile and viable South African airline. SAA will contribute to the venture, the brand, the flag, landing slots, route licences, lounges and a successful loyalty program (Voyager).
“With this partnership, we believe we are closer to achieving the important objective of having a sustainable national airline. The new SAA will not be dependent on the fiscus. It will be agile enough to cope with the current uncertainty and improvement in global travel. As we recover from the impact of Covid-19 on the aviation industry, African countries will reopen their borders, enabling the movement of people, cargo and trade. We want to relaunch SAA as an iconic South African brand and are confident that we have the right partner to achieve this objective,” said Gordhan.
Gordhan also said: “Government will retain a ‘golden share’ in SAA, which will ensure that the flag is retained, that it remains domiciled in the country, and issues such as transformation goals remain upper-most.”
Harith General Partners co-founder and chair Tshepo Mahloele said the Takatso Consortium has the experience, expertise, and capital to transform SAA into a substantial operating business in its own right.
“The partnership represents a robust, exciting South African-bred solution. Harith, as owners of Lanseria International Airport, have significant experience in the transport, infrastructure and aviation sectors. We have deployed more than a billion dollars into a portfolio of critical infrastructure assets, across the African continent, that support regional economies.
“Global’s operating model is unique, highly efficient, and fit for purpose for a newly launched airline. The consortium has empowerment at its heart, and a unique blend of skills and experience,” he said.
Takatso chief executive, former Comair co-chief executive and, recently, co-founder of Global’s airline LIFT, Gidon Novick said he was confident that SAA could be built into an efficient, customer obsessed and innovative airline, that serves as a catalyst for growth in the South African economy, particularly tourism.
“Covid-19 has created a unique set of circumstances for the industry. There are incredible skills and talent available right here in South Africa, as well as an abundance of low-priced aircraft available globally – both critical ingredients for a successful airline. Transformation will be core to SAA, including accelerated training and promotion of qualified black pilots, and a broad based employee incentive scheme,” he said.
According to a statement, a due diligence exercise will now get under way and, once completed, further details will be outlined on key issues, such as the route network roll-out, fleet selection, leadership team, transformation, brand relaunch, technology, SAA’s subsidiaries, global partnerships and Voyager.
