South Africa\u2019s Rand Merchant Bank, the investment banking arm of FirstRand Ltd., has been appointed as an adviser to help the government assess offers for stakes in its insolvent national airline, according to two people familiar with the situation.<\/p>\n
The state is looking to raise more than R10 billion ($575 million) that South African Airways administrators say is needed to revive its operations eight months after going into bankruptcy protection.<\/p>\n
Finance Minister Tito Mboweni has said the National Treasury will not use its own money, beyond R16.4 billion in existing debt guarantees, and will instead seek \u201cstrategic partners\u201d or private-equity backers as well as tapping pension funds and global financial institutions.<\/p>\n
\u201cThe Department of Public Enterprises has identified a transaction adviser,\u201d the ministry said in a statement on Wednesday, without identifying the firm.<\/p>\n
\u201cThe advisers are expected to assess unsolicited expressions of interest from private-sector funders, private-equity investors and partners for a future restructured SAA.\u201d<\/p>\n
The people who identified RMB as the adviser asked not to be identified as they aren\u2019t authorised to disclose the information publicly. A representative of RMB declined to comment.<\/p>\n
The Department of Public Enterprises will release more information on the transaction adviser in due course, spokesman Sam Mkokeli said by phone.<\/p>\n
SAA hasn\u2019t made a profit for almost a decade and has been surviving on state bailouts. It was placed in business rescue, a local form of bankruptcy protection, in December.<\/p>\n
With South Africa facing its biggest economic contraction in almost 90 years Mboweni has said he is loath to spend more money on loss-making state companies.<\/p>\n