Public Enterprises Minister Pravin Gordhan announced on Wednesday afternoon that the sale of a 51% stake in South African Airways (SAA) to the Takatso consortium has been called off.
This comes nearly three years after the consortium was announced as the preferred bidder to acquire the R51 airline, suggesting a total valuation of R100 and keeping details of the deal with Takatso confidential. This was achieved after a fierce struggle by Mr. Gordin, who wanted the system to remain in place.
advertisement
Continue reading below
read:
SAA's secrets may be exposed [last] week
Mr. Gordhan faces subpoena over SAA and Takatso deal
Although SAA is once again fully state-owned, Mr Gordhan said its future operations would not be funded by taxpayers. The company plans to consider various other financing options to expand its business, including expanding its route network.
He explained that the original deal took place at a time when SAA had just emerged from business rescue in the aftermath of the COVID-19 pandemic and was not operating at the time.
At the time, the company's assets were valued at R2 billion, equivalent to the liquidation value of the property, which is “not a lot” for the business. Since then, the airline has resumed operations and added routes.
A new valuation was carried out at the end of last year, putting the business at R1 billion and the real estate at R5.5 billion.
The government began renegotiating the deal with Takatso, but late last week both parties agreed that the deal needed to be terminated. He submitted this to the Cabinet on Wednesday morning, which gave the go-ahead for the cancellation to take effect.
Read: SAA and Takatso contract under renegotiation
He said SAA could survive for the next 12 to 18 months and that there were various other ways to raise immediate funding, “but there is no chance of SAA getting funding from the Treasury in the coming months.” No,” he said.
advertisement
Continue reading below
Gordhan, who previously announced his retirement from politics after the May 29 election, said the government and the new administration would consider various ways forward, including code sharing, partnerships and equity partners. He said it was possible.
He assured SAA staff that their jobs are safe.
More to come.
read:
Gordhan’s resignation will make it easier to sell mangoes – BRP
Pravin Gordhan's legacy
