Friday, 11 June 2021
Pretoria: Public Enterprises Minister Pravin Gordhan says government has found a strategic equity partner in a bid to save the embattled South African Airways (SAA).
Gordhan on Friday confirmed that Cabinet has agreed for government to own 49% of the stake, while Takatso Consortium will hold 51% of SAA.
The ground breaking venture comes after the State-owned airline, SAA, was placed under business rescue in December 2019, a process which concluded in April this year.
According to Gordhan, the objective has always been to restructure SAA to ensure that it is viable, agile, competitive and not reliant on the State’s coffers.
The Minister said Takatso Consortium comprises Harith General Partners, a leading investor in African infrastructure and airports.
Meanwhile, airline management firm, Global Airways, has been selected as the preferred strategic equity partner for SAA.
“This is a demonstration of South Africa’s ability to develop an entirely home-grown solution to successfully relaunch SAA as a sustainable, competitive and transformed airline.
“Once again, so that we understand this clearly, this airline is not dependent on the fiscus,” Gordhan said.
As part of the relaunch of SAA, Gordhan said the finances of the operations of the airline will be provided solely by the consortium, which will provide about R3 billion during the initial stages.
Gordhan believes that the public-private partnership will reposition SAA in the domestic market, continent and beyond.
“It will give us an opportunity to augment SAA with technical, financial, and operation expertise,” he explained.
SAA, which is a well-known brand globally, will contribute its brand, landing slots, route licences, lounges and loyalty programme into the partnership.
Like many airlines in the world, Gordhan said SAA was hard-hit by the COVID-19 pandemic.
However, he believes that the global race to vaccinate the adult population will make an impact on both regional and global travel.
“It is anticipated that Africa will have the largest and most rapidly growing market, as far as aviation is concerned, in terms of the movement of the people, cargo and trade.”
Meanwhile, Gordhan said SAA will begin to revive and re-establish partnerships with African and international airlines and networks to fully access the growing African aviation market.
The Minister said SAA will also leverage the commercial skills of the consortium, and build on the brand name and positive image of the airline to serve the national interests of the country.
“We will build a new and uniquely South African culture in the airline that showcases the country’s broad skills, talent and diversity.”
The State will have a “golden share” of 33% of the entity’s voting rights and certain areas of national interest, said the Minister.
Government will also enjoy some pre-emptive rights and take responsibility for historic liability.
The partnership has also committed to an inclusive and diverse team, representative of the country’s demographics at all levels at the airline.
According to the Minister, there will be a majority of Black ownership, since the consortium is 51% Black-owned. This includes the composition of the board, management and staff.
According to the Minister, the board chairperson and the executive team will be South African.
The consortium will prioritise the training and promotion of qualified Black pilots as part of a non-racial team of qualified men and women.
A memorandum of understanding, the Minister said, has been signed between the consortium and government.
Once the due diligence exercise completed, a purchase and sale agreement will be signed.
“Government is pleased that all the elements have been brought together for a leading and sustainable Pan-African airline to emerge, and that this will be done without any future reliance on the fiscus.”
Gordhan believes that South Africans will one day be able to buy shares once the airline has “settled down in its new form”.
“Government will not be putting in more money. That’s the clear message we’d like to communicate to you.”