The Competition Tribunal has approved the acquisition of a 51% stake in South African Airways by Takatso Aviation. This marks a new era for the airline in which the government is no longer the majority shareholder.
The tribunal said on Tuesday night it had approved the transaction, subject to a moratorium on retrenchments and minority shareholders divesting from the Takatso Consortium, which comprises infrastructure investment firm Harith, an 80% shareholder, while Global Aviation and Syranix hold 10% each.
The tribunal said it would release its reasons in due course.
The department of public enterprises welcomed the approval of the deal, calling it a “significant step in the government’s efforts to consolidate the re-emergence of the national carrier as a strategic asset”.
It said the decision sets the department and Takatso on course to finalise critical regulatory requirements to conclude the transaction aimed at making SAA a competitive, profitable and viable carrier; both locally and internationally.
In May, the Competition Commission approved the transaction but on condition Global Aviation and Syranix — who co-own local carrier LIFT airline — exit because their participation would decrease competition in the domestic passenger airline market.
“Takatso will have access to SAA’s competitively sensitive information by virtue of its majority stake in SAA, pursuant to the proposed merger. This concern is further worsened by the fact that the domestic passenger airlines market is highly concentrated, barriers to entry are high and is amendable to co-ordinated effects,” the commission said at the time.
BusinessLIVE reports that the minority shareholders have appointed a local corporate advisory firm and an international investment bank to identify potential investors to buy their shares.
Gidon Novick, who represents them, confirmed they were looking to dispose of their stake.
“We have proactively started the process of selling our shares, which I imagine will take some time. We do not want to hold up Takatso’s transaction with SAA and perpetuate any further state funding of the airline,” he told BusinessLIVE.
Public enterprises minister Pravin Gordhan said the Tribunal had affirmed government’s belief that a revitalised and well-capitalised SAA presents the country with significant opportunities to boost economic connectivity and strategic reach that should benefit the economy and South Africans for years to come.
“I am confident that the repositioning of SAA sets a very good example of what can be achieved when the right financial and operational framework is given to state-owned companies so they can fulfil their mandate to advance our economic transformation and development as a country. It is gratifying to see that we are on the verge of having SAA finally infused with the requisite strategic vision, expertise and capital by Takatso,” Gordhan said.
In terms of an agreement concluded with the department of public enterprises, Takatso will acquire a 51% stake in SAA and provide a capital injection of R3bn over two years. However, government would still be liable for about R3.5bn of SAA legacy debt, including settling creditors and refunding those who bought tickets before the airline went into business rescue.
In February, finance minister Enoch Godongwana allocated SAA R1bn partly to settle outstanding liabilities.
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Competition Tribunal gives a nod to the Takatso deal
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The Competition Tribunal has approved the acquisition of a 51% stake in South African Airways by Takatso Aviation. This marks a new era for the airline in which the government is no longer the majority shareholder.
The tribunal said on Tuesday night it had approved the transaction, subject to a moratorium on retrenchments and minority shareholders divesting from the Takatso Consortium, which comprises infrastructure investment firm Harith, an 80% shareholder, while Global Aviation and Syranix hold 10% each.
The tribunal said it would release its reasons in due course.
The department of public enterprises welcomed the approval of the deal, calling it a “significant step in the government’s efforts to consolidate the re-emergence of the national carrier as a strategic asset”.
It said the decision sets the department and Takatso on course to finalise critical regulatory requirements to conclude the transaction aimed at making SAA a competitive, profitable and viable carrier; both locally and internationally.
In May, the Competition Commission approved the transaction but on condition Global Aviation and Syranix — who co-own local carrier LIFT airline — exit because their participation would decrease competition in the domestic passenger airline market.
“Takatso will have access to SAA’s competitively sensitive information by virtue of its majority stake in SAA, pursuant to the proposed merger. This concern is further worsened by the fact that the domestic passenger airlines market is highly concentrated, barriers to entry are high and is amendable to co-ordinated effects,” the commission said at the time.
BusinessLIVE reports that the minority shareholders have appointed a local corporate advisory firm and an international investment bank to identify potential investors to buy their shares.
Gidon Novick, who represents them, confirmed they were looking to dispose of their stake.
“We have proactively started the process of selling our shares, which I imagine will take some time. We do not want to hold up Takatso’s transaction with SAA and perpetuate any further state funding of the airline,” he told BusinessLIVE.
Public enterprises minister Pravin Gordhan said the Tribunal had affirmed government’s belief that a revitalised and well-capitalised SAA presents the country with significant opportunities to boost economic connectivity and strategic reach that should benefit the economy and South Africans for years to come.
“I am confident that the repositioning of SAA sets a very good example of what can be achieved when the right financial and operational framework is given to state-owned companies so they can fulfil their mandate to advance our economic transformation and development as a country. It is gratifying to see that we are on the verge of having SAA finally infused with the requisite strategic vision, expertise and capital by Takatso,” Gordhan said.
In terms of an agreement concluded with the department of public enterprises, Takatso will acquire a 51% stake in SAA and provide a capital injection of R3bn over two years. However, government would still be liable for about R3.5bn of SAA legacy debt, including settling creditors and refunding those who bought tickets before the airline went into business rescue.
In February, finance minister Enoch Godongwana allocated SAA R1bn partly to settle outstanding liabilities.
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