South Africa: SAA’s new deal gives it wings, but no flying the skies just yet

By Xolisa Phillip, in Johannesburg

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Posted on June 21, 2021 11:03

Reuters/Mike Hutchings

The South African government has relinquished its ownership and controlling stake in the national carrier after selecting the Takatso Consortium, which consists of Harith General Partners and Global Airways, as its preferred strategic equity partner. The new ownership cedes 51% to the consortium while the government retains 49%. But much work remains to be done before the troubled carrier takes to the skies again. 

The deal has been struck by the department of public enterprises (DPE), whose ministry is headed by Pravin Gordhan. The DPE is the government shareholder representative at South African Airways (SAA) and is responsible for the oversight of state-owned entities, including Denel and Alexkor.

The last time the government made such an ownership concession was in the early 2000s with Telkom, which used to be state owned and controlled but is now a Johannesburg Stock Exchange-listed telco that competes with other players in the sector.

The Telkom roadmap is widely considered a success because the listed telco is self-sustaining. A similar path is envisaged for SAA, however, that is a far-off reality because there are technicalities that must be addressed around the strategic equity partnership.

Insiders’ perspective

The Africa Report spoke to insiders, who asked not to be named because they are not authorised to talk to the press about what happens next following the DPE’s announcement that the Takatso Consortium is the government’s preferred strategic equity partner.

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