The Minister of Public Enterprises Pravin Gordhan has announced that 51% of South African Airways (SAA) will be sold to black-owned consortium Takatso, with the group becoming its majority equity partner after months of efforts to salvage the failed SEO.
The Takatso consortium is comprised of Johannesburg-based Global Airways which owns recently launched domestic airline Lift and private-equity firm Harith General Partners. It has pledged to invest over R3.5 billion into SAA over the next three years.
Gordhan said on Friday 11 June that key elements of partnership include:
Ownership: The Takatso Consortium will own 51% of the airline and Government 49%, with the airline intended to be listed in the future to address future funding requirements and enable all South Africans to take part in its success.
Funding: The Consortium provides the required capital, leaving no further burden on government.
Board representation: Board seats will follow the equity interests of the shareholders.
Management representation: The composition of the Management team shall take into account South Africa’s national demographics and transformation agenda.
Golden Share: The Government will have a ‘golden share’ of 33% of the entity’s voting rights and certain areas of national interest.
Pre-emptive rights: Standard pre-emptive rights, rights to match etc., will be included for the benefit of both parties.
Historical Liabilities: All historical liabilities will be the responsibility of the Government within the amount allocated.
Subsidiaries: As part of the due diligence process, the DPE and the Consortium will carry out a joint assessment on the future of the subsidiaries.
With this partnership, we believe we are closer to achieving the important objective of having a sustainable national airline,” Gordhan said. The new SAA “will be agile enough to cope with the current uncertainty, and improvement, in global travel.”
Transformation was listed as an imperative factor in establishing the equity partnership, with Gordhan saying that government and takatso are “fully committed to an inclusive and diverse team representative of our demography at all levels in the airline.”
The Consortium is 51% black owned, and the Board and Management, as well as staffing shall, in addition to the appropriate skill-sets, “take into account South Africa’s national demographics and transformation agenda.