SAA deal in sight as minorities agree to sell

The minority shareholders in the Takatso Consortium have accepted the Competition Commission condition that they exit the strategic equity partnership with South African Airways (SAA) in order for the deal to go through.

The minority shareholders are now in the process of appointing a corporate advisor with experience in global aviation deals. The advisor will help assess the market for potential buyers, confirm the fair value of the business and assist with the legal process, according to Gidon Novick, who represents the minority shareholders.

“We will use our best endeavours to sell our minority stake, but obviously the outcome cannot be guaranteed,” Novick told News24. “It’s a pity. We really wanted to play a meaningful role in a successful privatisation in this country.”

In May, the commission recommended that the Competition Tribunal approve the disposal of a 51 percent stake in SAA to Takatso — provided certain conditions are met.

One of these conditions is that the minority partners in the consortium, Global Aviation and Syranix — which co-owns LIFT airline — exit, to avoid decreasing competition in the domestic passenger market.

In terms of the Takatso deal, the consortium would obtain 51 percent of SAA’s shares and provide the airline with a capital injection of R3 billion over two years. The Department of Public Enterprises (DPE), as the government’s shareholder representative, would keep 49 percent.

Takatso consists of infrastructure investment firm Harith (80 percent), Global Aviation (10 percent), and Syranix (10 percent). The consortium will only take the helm at SAA once the deal is finalised. It has also indicated that it will not take on any of SAA’s remaining legacy debt — which stands at about R1,5 billion.

Novick said they have written to the Competition Tribunal to say a process has been initiated for the sale of shares held in Takatso by the minority shareholders to take place.

Asked what the value of the minority stake is, he said it will be best assessed by the interest expressed by potential buyers.

“That would be an honest reflection of the market value in conjunction with going through the asset base of SAA and the potential income generation of the airline,”  said Novick.  —  News24.