Almost 18 months after the government announced its partnership with the Takatso Consortium, there are still more questions than answers about the deal, which will see the private entity acquire 51% of the government’s stake in SAA.
The transaction has been shrouded in secrecy, with National Treasury and the auditor-general revealing earlier this year that they were excluded from it.
YOU MAY ALSO LIKE: Donald Trump Announces He Will Run For White House In 2024
MPs on the standing committee on public accounts [Scopa] demanded more information about the deal as well as data on SAA’s performance since it resumed flight operations in September 2021.
“Even during the time of state capture, [former SAA chair] Dudu Myeni, perhaps in this very room, would come to a meeting of the finance committee and give us all the details about the finances of the airline.
“It always used to astound me that someone who was destroying the airline was quite happy to give the information, and yet now we get a one-liner. It cannot be. We need the full report,” said exasperated DA MP Alf Lees.
How was Takatso selected? Who were the other bidders, and what did they have to offer?
What about the performance of SAA? What are its losses and profits since September 2021, when scheduled flight activity resumed? How are operations paid for?
Why is the government still selling SAA if there is a resurgence? At what cost?
These were some of the questions posed by MPs, but it was as if they were speaking to a brick wall.
“In such an environment you have players with reasonably strong elbows and weak elbows who will attempt to gain advantage of one kind or another and as any competitor would do,” he said.
YOU MAY ALSO LIKE: Malema And EFF Want Jacques Pauw’s New Book Removed From Shelves
While SAA was a government entity, public enterprises minister Pravin Gordhan said that it operated in a competitive industry.
Gordhan said that the deal should be viewed in the context of a close period, not in secrecy or withholding information.
“It’s about walking this very interesting but difficult path between commerciality on the one hand and business reality, and the fact that it’s a government entity that must account for public funds being used towards it.”
He claimed that there is nothing in the law that assists the government in striking the necessary balance.
Gordhan explained that they were unable to respond to MPs’ questions about the expressions of interest, nor could they reveal information about the airline’s monthly operations because this could be competitive information that other airlines do not share in the public domain.
“The only limitation to presenting the full facts or the report as requested is the confidentiality element because there would be a non-disclosure agreement signed between the transaction adviser [on behalf of government] and each of the interested parties on the other hand,” he said.
Melanchton Makobe, deputy director-general of public enterprises, said the transaction — the sale of Takatso’s 51% stake — had not yet been completed.
“It is a live transaction that is in progress and has not been finalised. This is what we call in commercial terms a close period, where the transaction is at this stage.”
According to him, a close period is when the finer details of the transaction cannot be communicated publicly because the transaction is at a commercially sensitive stage.
The finer details will be shared with parliament and the South African people once the transaction is completed and the deal becomes unconditional, according to Makobe.
The board of directors of SAA placed the airline in business rescue in December 2019.
The government contributed R10.5 billion of the R14 billion needed to implement the business rescue plan. The remaining funding is still owed.
In April 2021, SAA exited the business rescue process. The government has decided that SAA will no longer be funded from the general fund, and that a strategic equity partner will be sought to provide the necessary capital injection into SAA.
“ I must indicate we followed due process in line with the applicable legislation, Takatso consortium was then identified as the preferred strategic equity partner for SAA,” said Makobe.
In June 2021, a memorandum of understanding was signed. The sale and purchase agreement containing the transaction’s terms and conditions was signed in February 2022.
In June 2021, a memorandum of understanding was signed. The sale and purchase agreement containing the transaction’s terms and conditions was signed in February 2022.
The transaction’s terms and conditions have not been disclosed, but the key elements of the partnership are that the Takatso consortium will own 51% of the airline and the government will own 49%.
The government also negotiated a golden share of 33%, which gives it veto power over issues of national interest, such as whether the airline will remain in South Africa, become a national carrier, and keep its flag.
The transaction is currently before the Competition Commission, which is one of the final steps before it can be completed.
Gordhan said that the transaction would be completed before the end of the fiscal year.
