SA hires Bain, Aba­cus to ad­vise on ail­ing state-owned air­lines

CityPress - - Business -

Gov­ern­ment has hired Bain & Com­pany to ad­vise it on the strat­egy and cor­po­rate struc­ture of the three loss­mak­ing state-run car­ri­ers to im­prove the ben­e­fit to the state from own­ing the air­lines.

Bain, which is based in the US, was awarded the con­tract as part of a joint ven­ture with Aba­cus Ad­vi­sory, ac­cord­ing to a post on Trea­sury’s web­site. The con­tract was awarded in Oc­to­ber for a three­month pe­riod, a spokesper­son for Trea­sury said.

Gov­ern­ment is seek­ing ad­vice on the cor­po­rate struc­ture of SAA and SA Ex­press, which could lead to the sale of a mi­nor­ity stake in the air­lines and the dis­posal of as­sets that aren’t cen­tral to their busi­nesses, ac­cord­ing to a sep­a­rate in­vi­ta­tion-to-bid doc­u­ment. The state is also seek­ing ad­vice on how to im­prove the fi­nan­cial per­for­mance of the air­lines, re­duce risk and de­velop a “well­co­or­di­nated strat­egy”, the doc­u­ment shows.

SAA and SA Ex­press are sur­viv­ing on state debt guar­an­tees at a time when gov­ern­ment is try­ing to rein in spend­ing and raise rev­enue amid slow­ing eco­nomic growth. Cabi­net ap­proved a new board for SAA on Au­gust 31 to over­haul man­age­ment of the air­line, which hasn’t made an an­nual profit since 2011.

The car­rier last month said it pre­sented a cor­po­rate plan to gov­ern­ment that in­di­cated a re­turn to profit in 2021.

SAA’s low-cost unit, Mango Air­lines, which is also in­cluded in the scope of the con­tract, made a net loss of R36.9 mil­lion in the year to March, news web­site Fin24 re­ported.

– Bloomberg

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.