Public Enterprises Minister Pravin Gordhan has announced Takatso Consortium as the new strategic equity partner for South African Airways.
Takatso will own 51% of the restructured airline, while the government will hold a 49% stake. The government says it will not be putting any more money into the new airline. Takatso will invest just over R3-billion in the new SAA.
Gordhan says government will have a 33% representation in the airline’s management while the operational capability will come from SAA staff and the Takatso Consortium. He says a memorandum of understanding between government and Takatso has been signed.
Public Enterprises Minister Pravin Gordhan announces equity partner for SAA:
Reactions
The Democratic Alliance (DA) has raised concerns about the partnership between Takatso Consortium and the South African Airways. DA’s Alf Lees says it remains to be seen how this will work out.
“Interesting thing is that it appears that the 51% shareholding is being gifted to this particular consortium at no cost to the consortium. In other words, they are giving it free and we would ask the question as to how come this particular consortium is given a gift of 51% of the shares at SAA when it hasn’t been a public call for a request for proposals.”
The Freedom Front Plus (FF+) says they have been advocating for the privatisation of SAA. FF+ member of Parliament, Wouter Wessels, says this is a good move even though there are concerns.
“In order for the taxpayer to no longer foot the bill for this failed airline, the bailout should stop. We do, however, question this specific partnership, the amount of money and we also have to question if they would be a further need for guarantees to get the airline flying again. That would be unacceptable as government debt is out of control.”
Due diligence
Gidon Norvick of Takatso Consortium says the due diligence which will be done on the new SAA in the coming weeks will also include an evaluation of the airline’s subsidiaries to assess their viability. Takatso is also expected to discuss the details of an employee share scheme aimed at ensuring that employees also have a stake in the new business.
Desmond Latham on SAA’s decision to use incoming capital to boost its subsidiaries:
It is understood that the chairperson of the board of the new SAA and the majority of the executive team will be South African.
“We’ve got all the insight and knowledge and the national interest that government brings. We’ve got the capital, financial insight and African experience that Harith has and from a Global point of view, we have an incredible depth of experience in the airline industry. We’ve got a lot to do and it’s certainly keeping us up at night. We’ve got to figure out which routes to fly, we’ve got to figure out what planes we want to fly, we’ve got to understand the subsidiaries of SAA a lot more than we currently do,” Novick elaborates.
One analyst says the partial privatisation of the troubled national carrier is an important step in the economic reform process.
The South African Cabin Crew Association (SACCA) says while it’s happy that the new deal would help create jobs in the sector, it has a lot of unanswered questions about its members at SAA and at subsidiaries like Mango and SAA Technical.
SACCA’s Christopher Shabangu says, “We really, as labour, have to be involved and understand what is going on … these are the people that have lost everything.”
– Additional reporting by Naledi Ngcobo.
