{"id":784574,"date":"2024-07-28T08:01:57","date_gmt":"2024-07-28T06:01:57","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=784574"},"modified":"2024-07-28T08:04:57","modified_gmt":"2024-07-28T06:04:57","slug":"call-to-put-saa-back-up-for-sale","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/784574\/call-to-put-saa-back-up-for-sale\/","title":{"rendered":"Call to put SAA back up for sale"},"content":{"rendered":"\n

Deputy President Paul Mashatile says that selling a majority of South African Airways (SAA) to those in the private sector with the capital and expertise to turn the embattled state-owned entity around may be the best way forward.<\/p>\n\n\n\n

In an interview with the Sunday Times<\/a>, Mashatile said that the government \u201cis not in the business\u201d of owning airlines, and thus, bringing<\/span> private players on board to make the entity profitable may be the best. <\/p>\n\n\n\n

\u201cI wouldn\u2019t mind resuscitating SAA as a state-owned company, but my approach would be to partner with the private sector because I don\u2019t think the government will have all the money [to run it],” said Mashatile.<\/p>\n\n\n\n

“Remember, SAA was bailed out a number of times; the Treasury must have spent close to R9 billion trying to rescue it,” he added.<\/p>\n\n\n\n

Back in 2019, SAA, which had around R28 billion in liabilities and was seen as a black hole for taxpayer-funded bailouts, was placed under business rescue (which it exited in 2021).<\/p>\n\n\n\n

The South African government planned to sell 51% of SAA to the Takatso group for R51\u2014made up of closely held Global Airways and private equity firm Harith General Partners\u2014before the deal was called off by former Public Enterprises minister Pravin Gordhan.<\/p>\n\n\n\n

One of the central disagreements was that of the reevaluated value of SAA \u2013 which was predetermined during Covid (when the airline was on the verge of being liquidated).<\/p>\n\n\n\n

\u201cIt became clear in the negotiations of the revised transaction structure [that it] must take into account public interest and fair market price; however, these requirements were not met in the renegotiations,\u201d said Gordhan.<\/p>\n\n\n\n

Although the deal did not take off, Mashatile said that while the airline’s performance seemed to be improving, the original plan to bring the private sector on board to make the airline profitable was the correct move and should be explored again.<\/p>\n\n\n\n

\u201cI think the government reached the stage at some point where it asked itself a question: do we want to own an airline, what\u2019s the point?\u201d<\/p>\n\n\n\n

\u201cThe right approach would have been to bring the private sector in even much earlier \u2026 If we can still do it now, I think we should because there are many people in the private sector who want to invest in an asset like that,\u201d said Mashatile.<\/p>\n\n\n\n

The next question would be who held the majority stake in the airline.<\/p>\n\n\n\n

Back in May 2024, interim board chairperson of SAA, Derek Hanekom said that the airline is still open to the possibility of a private equity partner investing in the state-owned airline \u2013 but it won\u2019t be looking for a majority owner.<\/p>\n\n\n\n

\n
SAA wants investors on board – but government in the cockpit<\/a><\/blockquote>