South Africa\u2019s government has retained special voting rights in the country\u2019s national carrier even after selling a majority stake, and will be given R3 billion ($186 million) in preference shares that can be redeemed through future cashflow.<\/p>\n
That means the state stands to benefit should new owner, the Takatso Consortium, revive a carrier that\u2019s struggled under years of heavy losses, corruption and mismanagement, according to a statement from the Department of Public Enterprises on Thursday.<\/p>\n
Takatso – made up of a local jet-leasing company and private-equity firm – will provide R3 billion in working capital and has valued SAA\u2019s assets at about the same amount, the department said.<\/p>\n
The group agreed to take control of the airline almost a year ago for a notional sum of about $3, in return for spending commitments and responsibility for operations.<\/p>\n
\u201cThe R51 was a nominal sum set some time ago when SAA was not at all a going concern,\u201d Public Enterprises minister Pravin Gordhan said by phone. \u201cWhile now it is still in the recovery phase, things are far better for government than it was when that price was set.\u201d<\/p>\n
The details emerged after the National Treasury criticized the terms of the deal, saying SAA represents a \u201ccontingent liability\u201d as the government may be liable for certain costs. The state will still be on the hook for outstanding \u201cbusiness rescue obligations\u201d stemming from the company\u2019s near 18-month bankruptcy proceedings, Takatso said in a separate statement.<\/p>\n
The government\u2019s voting rights, known as a golden share, will mean SAA can\u2019t be sold on without its consent and the state will retain a stake of at least 33.3%, the DPE said. It will also have full voting rights over \u201cmatters of national interest.\u201d<\/p>\n