Public Enterprises Minister Pravin Gordhan
Photo by: Reuters
South African Airways (SAA) has received interest from several private equity partners and a transaction advisor has been appointed to engage with parties in a process which could be wrapped up either in December this year or early 2021, said Public Enterprises Minister Pravin Gordhan.
The minister on Wednesday was responding to questions posed by members of Parliament. Democratic Alliance (DA) MP Ghaleb Cachalia had asked for details on the expression of interest from private equity partners.
"We have received a considerable number of expressions of interest from several financial institutions, private equity partners and airline operators," said Gordhan.
The transaction advisor is assessing and engaging with parties. "The process is an advanced stage," the minister told MPs. Once the process is wrapped up, the outcomes would be communicated, he assured.
The national carrier was placed in business rescue in December 2019 as it faced a liquidity crisis.
During the tabling of the medium-term budget policy statement, Finance Minister Tito Mboweni said R10.5-billion would be made available to SAA to support the process.
Both Mboweni and Gordhan have defended the decision amid criticism from opposition parties – as funding had to be reprioritised from national departments and their public entities as well as conditional grants of provincial and local governments.
Gordhan has said the monies would go towards reimbursing consumers for unflown tickets, creditors and employment-related costs. He reiterated statements that liquidation would not be ideal.
"It must be noted, SAA has a highly credible reputation both across the African continent and globally. It is an attractive proposition," said Gordhan.
Potential private equity partners, however, have made it clear they will not take on debt or restructuring costs, he explained.
"It is a matter of government to make sure all liabilities will be paid, including restructuring costs of SAA."
He added that there are discussions taking place to transition SAA out of business rescue.