In a significant turn of events, the Minister of Public Enterprises, Pravin Gordhan, announced on Wednesday the termination of the deal to sell a 51% stake in South African Airways (SAA) to the Takatso consortium. This decision marks the end of a tumultuous journey that began when the agreement was initially reached back in June 2021.
The sale of the majority stake in SAA faced numerous challenges, including the need for re-evaluation of the airline’s assets due to the considerable time elapsed between the initial agreement and the finalization of the share sale. Speaking at a media briefing, Gordhan cited the impact of the post-Covid-19 market as a significant factor in the decision, leading to a revaluation of SAA’s worth.
One of the pivotal points leading to the collapse of the deal was the revised valuation, which fell short of Takatso’s original offer of R3-billion. The airline’s business was valued at about R1-billion, with its property at R5-billion. Despite initial hopes for a successful partnership, Gordhan stated, “Various factors have led us to the decision to cease negotiations with Takatso,” emphasizing that the termination was a mutual agreement reached due to the lack of a clear path forward.
Takatso echoed this sentiment in a statement, explaining that the revised transaction terms were no longer in the best interests of its stakeholders, citing unfulfilled transaction closing conditions, including cumbersome divestiture conditions imposed by the Competition Tribunal and the need for further legal and regulatory approvals.
As negotiations with Takatso come to an end, Gordhan affirmed the government’s commitment to finding a suitable partner for SAA. However, he acknowledged that the search would not continue through the previously pursued process with Takatso. With SAA now set to remain under state ownership, attention turns to the government’s next steps in charting the future course for the airline and addressing the challenges ahead.
“While the termination of the deal with Takatso consortium marks a significant setback, it opens a new chapter for SAA as it reverts to full state control, presenting both challenges and opportunities in the aviation landscape of South Africa,” said Gordhan, concluding the briefing.
