Fly Modern Ark twice offered to cut deal with state carrier
An offer to merge with South African Express was made this year by Fly Modern Ark SA, which plans to launch its own regional airline within the next six months.
An original offer was made in February to Public Enterprises Minister Lynne Brown and then again to her department in May. But nothing came of it after talks with the department.
Fly Modern Ark founder Theunis Crous said the company was open for negotiations.
The offers were made before the financially fragile stateowned airline faced the threat of liquidation for a debt of R87.3m to Solenta Aviation, which lodged its application for winding up in the High Court in Johannesburg last week. South African Express plans to oppose the application as it contests the amount owed.
Asked if the Department of Public Enterprises was considering the offer from Fly Modern Ark, spokesman Richard Mantu said the department, in partnership with the Treasury, “is developing an optimal corporate structure for the realignment of state-owned airlines. There is an interministerial committee looking at the best practice to determine the most feasible and ideal corporate structure.”
The outcome would determine whether there was a need for external equity partnerships.
Fly Modern Ark’s February offer to purchase 80% of South African Express was turned down and the May offer, which terminated on May 31, envisaged Fly Modern Ark taking 49% of a merged entity that would operate as South African Express.
The state would continue to own 51% of the merged entity.
Fly Modern Ark, which has Duduzile Primrose Crous as president, sent its offer to director-general of public enterprises Mogokare Seleke.
In terms of the latest offer, Fly Modern Ark proposed to inject R3.5bn in new assets including 10 new MA60 passenger and two MA600F cargo aircraft, debt and operational funds.
The offer would depend on the “satisfactory completion” of a due-diligence probe into the airline and no deterioration in its business prospects, according to the letter of offer sent to Seleke.