Pretoria announces new SAA strategic equity partner

Black-owned South African-based Takatso Consortium has been selected as the new 51% preferred strategic equity partner (SEP) of South African Airways (SA, Johannesburg O.R. Tambo), with the government retaining a 49% share, Public Enterprises Minister Pravin Gordhan told an online media conference on June 11. The consortium comprises of Harith General Partners, a leading investor in African infrastructure and airports including Lanseria, and ACMI specialist and airline management firm Global Aviation Operations (GE, Johannesburg O.R. Tambo), which also owns the virtual airline brand Lift Airlines (GE, Johannesburg O.R. Tambo). Gordhan said the intention was to list the new SAA to address future funding requirements. The government would maintain a non-dilutable “golden share” of 33% of the entity’s voting rights to protect certain areas of national interest such as ensuring that it remained domiciled in South Africa and achieved national transformation goals. To start with, the consortium would inject over ZAR3 billion rands (USD221 million) into the new SAA and raise further capital as needed. The government would not provide any further funds; it would however take care of SAA’s historical debt of ZAR14 billion (USD1 billion). The future of both Lift and SAA subsidiary Mango Airlines (JE, Johannesburg O.R. Tambo) were “all in the mix at the moment”, Gordhan said. Anything could happen including some of the subsidiaries being closed down, he said. The Takatso consortium was currently completing its due diligence, including an evaluation of the SAA subsidiaries, which also include SAA Technical and catering company AirChefs, which would have to undergo restructuring. At this stage, a memorandum of understanding (MOU) has been signed between the consortium and the government, which has completed its own due diligence into the consortium. Once all due diligence processes are concluded, there would be a signing of a purchase-and-sale agreement. In parallel, there would be “relatively immediate flying”, and the development of a route, fleet, and restart plan. August has been punted as the targeted restart date of the airline on key domestic and selected regional routes, with international flights within the next two years. Gordhan said board seats would follow the equity interests of the shareholders and the composition of the management team would reflect South Africa’s national demographics and transformation agenda. Staff would be recruited from SAA and the consortium, and an employee share scheme would be established. The announcement followed approval from the South African Cabinet on June 9, following a year-long process undertaken by Gordhan’s Department of Public Enterprises (DPE) to find a suitable strategic equity partner for SAA.