Takatso brushes off Novick’s resignation

Takatso Consortium, a group of investors who are buying a controlling stake in SAA, brushed aside the resignation of Gidon Novick as director on Monday, saying that his departure paves the way for it to manage a conflict of interest prudently. Novick left the consortium, citing lack of access to information on the deal’s progress.

Takatso Consortium, a group of investors buying a controlling stake in SAA, brushed aside Gidon Novick’s resignation as director on Monday, saying that this paves the way for it to manage a conflict of interest prudently.

Novick, whose long experience in aviation includes guiding Comair for some of its 75 years of uninterrupted profit growth, departed Takatso Consortium, citing lack of access to information on the deal’s progress.

Takatso is a consortium of Harith General Partners, aircraft leasing firm Global Aviation and Novick cofounded low-cost airline Lift. Novick’s departure comes as questions are being asked about the fate of the deal.

The government has failed to allocate R3.5bn to settle historical SAA debt, which is one of the most important conditions for finalisation of the transaction.

Takatso was unfazed by Novick’s departure, saying it was a move in the right direction as it paves the way for the consortium to prudently manage the conflict of interest that arose in the process of the transaction.

“Novick, Lift has (independent of Takatso) pursued business relationships with SAA outside of the Takatso-SAA transaction and competition processes thereby heightening the requirement for Takatso to maintain internal confidentiality over information relating to SAA and the SAA transaction,” Takatso said in a statement.

“Novick’s resignation will therefore assist Takatso in managing these inherent conflicts of interest and maintaining confidentiality over sensitive information on a continuing basis.”

The situation made it untenable for Novick to stay on as director even though his company, Lift, will remain a minority shareholder in Takatso.

“We don’t have access to information around the progress of the deal, the raising of the funding that is necessary for the deal as well as our involvement in the business going forward,” said Novick.

“Being a director of a company without access to important information is difficult and not practical in terms of the responsibilities as a director.”

The airline, which resumed operations in September last year after 16 months in business rescue, is one of the highestprofile victims of the corruption frenzy in the state-capture years, losing money every year for 10 years and surviving on government bailouts.

The sale of the 51% stake signalled a change in the government’s approach to state-owned companies, in which private investment was not previously possible, except in rare cases.

But the finalisation of the deal, under which Takatso will inject R3bn over three years in working capital in exchange for the stake, was thrown into doubt last month after finance minister Enoch Godongwana left SAA out of the combined R33bn in bailout allocations made to other stateowned entities.

The airline — which has received R16.4bn in state funding since 2020 to settle government-guaranteed debt and interest costs as well as to complete its business rescue process

— requires R3.5bn from the government to pay off the remaining debt owed to unsecured creditors and for unflown ticket liabilities.

The public enterprises department, which has been pushing for the deal to be finalised, said that the matter will be attended to in due course.

“Government has agreed that the outstanding amount to fully implement the business rescue plan is a legal obligation that government has to fulfil,” said department of public enterprises spokesperson Richard Mantu.

“All the regulatory processes are currently being complied with and will be completed as soon as possible.”