SAA terminates R256 million deal with unlicenced financier
South African Airways (SAA) has taken a decision to terminate the services of BnP Capital as a financial services provider to the airline, the airline announced on Thursday.
The effect of this decision means that SAA has terminated both its appointment of BnP Capital as transaction adviser and the appointment to source funds on behalf of the airline.
The decision was communicated to BnP Capital on Wednesday, the airline said.
Earlier in July BDLive reported that SAA agreed to pay a R256 million award to “boutique financier” BnP without going through the appropriate tender processes.
According to the report, the SAA board waived tender procedures for the contract – against advice from its own treasury – and ended up paying three times what it had to for services.
BnP was initially appointed to advise SAA on the restructuring of the debt. The company then advised that it be hired, urgently, to raise the financing itself, securing a 1.5% success fee in the process.
Civil group, Outa, then exposed the holes in the deal further by providing evidence that BnP had its financial services licence suspended by the Financial Services Board, which should have made the company ineligible for the SAA contract in the first place.
Outa gave SAA until Monday (18 July) to show its intent to cancel the deal, or face further legal action. SAA then moved to suspend the deal until it could investigate.
With News24
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