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General AviationSouth African Airways 51% stake sold to Consortium

South African Airways 51% stake sold to Consortium

The Aviator Africa SOUTH AFRICAN AIRWAYS

The South African government is selling South African Airways (SAA) 51% stake to Takatso Consortium. This Strategic Equity Partner will drive the airline going forward. Takatso consortium will commit more than 3 billion rand ($221 million) to the struggling airline hence a new lease of life.

The consortium includes Pan-African investor group Harith Global Partners and Aviation Group Global Aviation.

Since 2019 in December, SAA has been under a form of bankruptcy protection. Due to the Corona Virus pandemic, its fortunes worsened and its operations were suspended in September 2020 due to lack of funds.

This partnership will come as a relief to the South African government and public as a whole since it comes after 18 whole months of long business rescue process.

SAA has previously been depending on government bailouts which places the national budget under enormous strain at a time of rapid debt rise. But this partnership will improve that financial burden.

Addressing Journalists on Friday, the public enterprises minister Pravin Gordhan said that the state would no longer provide any funding to the airline which exited administration in late April after receiving 7.8 billion rand from the government.

He added that that the government will retain a 49% stake with the intention of eventually listing the airline to address future funding requirements.

“The objective of bringing in an equity partner to SAA is to augment it with the required technical, financial and operational expertise to ensure a sustainable, agile and viable South African airline,” he further said.

Gidon Novick Takatso’s CEO said, “COVID has created a unique set of circumstances for the industry. There are incredible skills and talent available right here in South Africa as well as an abundance of low-priced aircraft available globally – both critical ingredients for a successful airline, Transformation will be core to SAA, including accelerated training and promotion of qualified black pilots and a broad-based employee incentive scheme”.

He told “Reuters” that Takatso would seek to relaunch SAA as soon as possible, prioritising first domestic service followed by regional destinations and International long-haul routes would follow but would be selected carefully, and SAA would also work to forge partnerships with major carriers.

“We’re going to be competing with the greatest airlines in the world, and we need to be mindful of that”, He added.

A due diligence exercise is going to get underway and  once completed, further details will be outlined on key issues such as the route network rollout, fleet selection, leadership team, transformation, brand relaunch, technology, SAA’s subsidiaries, global partnerships and Voyager.

However, an initial public offering for the airline is unlikely to happen within the next three years, and SAA would first need to become profitable, Takatso Chief Executive Gidon Novick said.

Joan Kifuko
Joan Kifuko is a communications enthusiast that is currently working as a writer at The Aviator magazine where you find your aviation news in one place. She is a journalist that has previously worked as a sales associate, guest relations officer, brand ambassador hence, the love for new adventures and roles. Joan graduated with a Bachelors degree of science in journalism.
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