The South African government has lost the majority stake of its ailing airline, South African Airways (SAA) through a deal with its new strategic partner Takatso Consortium.
Public Enterprise Minister Pravin Gordhan has announced the news that the government has reached an agreement with Takatso Consortium, a private company, that will now own 51% of the airline, with the government remaining with a minority stake at 49%.
“Government and the ANC [have] indicated over some time the intention to restructure SAA. The airline was placed into business rescue in December 2019 and since then our objective has been to ensure a viable and competitive airline and once launched, not reliant on the fiscus,” says the Minister during a virtual briefing.
Takatso Consortium, a 51% black-owned enterprise that comprises pan-African investor group Harith Global Partners and aviation group Global Aviation, is expected to initially pump R3-billion into the airline. SAA will retain its name and will be domiciled in South Africa.
Gordhan says that the government will no longer be putting money into the airline. All future funding will come from Takatso and that the objective of the partnership is to create a viable, scalable national airline in its own right. Fin24 reports that SAA is set to begin building new partnerships within the continent after it is relaunched once all “due diligence” is completed.
“Once the due diligence exercise is completed, we will keep the public further informed about the exact launch dates and more,” says Gordhan.
The minister says that the government has negotiated a non-dilutable “golden share” of 33% of the airline, meaning that the government will always have some stake in SAA. But this move in assurance may be a spoiler for future privatisation of the airline.
“Harith, as owners of Lanseria International Airport, has 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,” Harith co-founder and Consortium Chair Tshepo Mahloele says in a statement.
“We believe the whole sector, from our point of view, is growing. We look forward to the venture and believe it will be very good,” Mahloele says.
“It is not often that one gets the opportunity to serve one’s country. Many people said we are crazy to start an airline in this environment. We believe it is the best time. Airline models around the world are being challenged and are flawed in many ways. We have the capital and financial insights of Harith,” says an emotional Gidon Novick, CEO of Takatso Consortium
“We have a lot to do. It keeps us up at night. We have to figure out the routes, what planes to fly and understand the subsidiaries of SAA and focus on customers, especially those who were so loyal to SAA in the past. We want to win them back and want them to know this is going to be their airline,” Novick continues.