The South African government has terminated the deal to sell a 51pc stake in South African Airways (SAA) to the Takatso Aviation consortium, citing a new ZAR6.5bn valuation of SAA and mutual agreement acknowledging no clear path forward for the transaction.
Outgoing Public Enterprises Minister Pravin Gordhan announced the decision after briefings with the Cabinet, highlighting concerns over Takatso’s failure to comply with the Competition Tribunal’s directive for its minority partner Global Aviation Operations/Syranix to divest its 20pc holding in the consortium due to antitrust issues related to ownership of competitor Lift Airlines.
Despite this, Global/Syranix indicated it had found a buyer for its stake in Takatso and its expected 10.1pc share in SAA, as stated by director Gidon Novick.
SAA’s valuation rose from ZAR2.4bn to ZAR6.5bn, based on a new business and property assessment in late 2023, reflecting post-Covid economic conditions. The government stressed the need for fair value in the sale, public interest protection, and leaving SAA in a more sustainable state post-business rescue.
Minister Gordhan highlighted that SAA can self-sustain for the next 12 to 18 months and emphasized the airline must operate efficiently, without relying on government funds. The future administration aims to secure jobs, execute the business plan, expand routes to around 40, and ensure the airline’s growth with rigorous oversight.
Takatso confirmed the mutual termination of the sale, expressing concerns over protracted negotiations and revised transaction terms posing high risk and uncertainty, leading to diminished opportunities in the aviation sector. The deal’s conditions remained unmet by the latest March 31 deadline, prompting Takatso to halt the process, despite the initial plan for Harith General Partners to acquire a controlling stake in SAA for ZAR51 in exchange for ZAR3bn in capital investment over two years.
