Takatso welcomes Treasury’s support for SAA deal

12th May 2022

By: Schalk Burger

Creamer Media Senior Deputy Editor

     

Font size: - +

The Takatso Consortium on May 12 said it welcomed Finance Minister Enoch Godongwana’s public support for its acquisition of a 51% interest in South African Airways (SAA), signalling a firm commitment from government to conclude the transaction.

Takatso would inject R3-billion into the airline over the next two years.

The Department of Public Enterprises (DPE) would be issued with R3-billion worth of preferred shares in SAA that will be redeemed through free cash flow of the business. The department will also retain a 49% equity stake in SAA to participate in future value creation.

“The support of the National Treasury and the DPE brings us a step closer towards reaching financial close of this milestone transaction in the aviation sector and brings us a step closer to the vision of a pan-African airline. We remain committed to a strong partnership with government and to see this transaction concluded successfully,” the consortium said.

“The proposed transaction has been structured in a manner that provides SAA with the greatest chance of success and allows for appropriate risk and reward sharing between the public and private partners of the new SAA on a continuing basis,” it added.

To recapture lost market share, a strong brand awareness strategy will form part of the implementation plan. Key to rebuilding the brand will be a new organisational culture and embracing digitisation and technology.

Additionally, SAA’s key subsidiaries, South African Airways Technical and Air Chefs, will see key strategic partners identified to acquire significant shareholdings in each entity, Takatso said.

Key to the new operating model will be a lean and agile cost structure, endorsed by Takatso’s commercial and technical partners and advisers.

“SAA will become a truly commercially enabled organisation, with a corporate governance model allowing for quick, transparent decision making. The ability to maximise revenue in a world where customer expectations are constantly evolving will be key. A minimised cost structure will enable flexibility to ensure competitiveness, with a focus on fleet, maintenance and staff costs.”

The consortium said it had an experienced and capable team ready to operate SAA as soon as all regulatory approvals have been achieved.

Takatso is also keen to contribute to the development of the aviation sector in South Africa, job creation and increasing connectivity in Africa.

“Takatso shares government’s view that the transaction will be an example of a public-private partnership in one of South Africa’s most important sectors, laying the foundation for the future listing of SAA.

“The relaunch of SAA will be without further recourse to the South African taxpayer, save for the business rescue obligations, which remain the responsibility of the current shareholder,” it said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION