South African public enterprises minister Pravin Gordhan has confirmed that a private consortium will buy a 51% stake and inject over 3 billion rand ($221.6m) into long troubled South African Airways.
The government has selected the Takatso Consortium, comprising infrastructure investor Harith General Partners and aviation group Global Aviation, as SAA’s preferred strategic equity partner.
The deal brings an end to years of speculation over the future of the troubled airline, which has been blighted by debt and mismanagement. The airline has received billions of rands in government bailouts but has not turned a profit since 2011, leading to a fierce debate in which some politicians advocated its permanent closure and others supported full or part privatisation.
Consortium promises to transform SAA
The Takatso Consortium, which says it will relaunch SAA as “a viable, sustainable, scalable and agile airline,” will own 51% and the Department of Public Enterprises 49%. The consortium said that it intends to list the airline in the future as a way of addressing future funding requirements.
The consortium is led by CEO Gidon Novick, former Comair co-CEO and co-founder of Global’s airline LIFT. Novick said that an “abundance of low-priced aircraft available globally” offered an opportunity for the relaunch, and said that transformation, including the accelerated training and promotion of qualified black pilots, would be at the heart of the relaunch.
In a statement, the consortium said that a due diligence exercise will now get under way. Once completed, the consortium will reveal details including route network rollout, fleet selection, the leadership team, transformation, brand relaunch, technology, the future of SAA’s subsidiaries, and global partnerships.
Harith General Partners co-founder and consortium chair Tshepo Mahloele said the consortium has the experience, expertise, and capital to transform SAA into a substantial operating business.
“The partnership represents a robust, exciting South African-bred solution. 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.”