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.
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
said
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.