SAA sale is off, says Gordhan

PUBLIC Enterprises Minister Pravin Gordhan has announced that the sale of South African Airways to the Takatso consortium has been called off.

Gordhan said he presented this to the Cabinet yesterday, saying it was due to new valuations that have emerged and put SAA at R1 billion and its properties at R5.5bn.

The announcement comes after months of drama and fights with the National Assembly’s portfolio committee on public enterprises, which has been demanding answers from Gordhan after former director-general of public enterprises Kgathatso Tlhlakudi accused him of corruption.

Gordhan announced yesterday that the deal was off because they decided to cut their losses with Takatso after valuations from reputable firms.

They were convinced SAA could sustain itself for the next year to 18 months. At no stage will SAA get bailouts, said Gordhan. He added SAA must be able to sustain itself.

During Covid, when the valuation was done, the value of SAA was R2.4 billion. After Covid this increased because of changed market values.

“The business valuation came out at R1 billion and the property valuation at R5.5 billion. This meant that there was a net increase in the property by R3.1 billion in the value of SAA. The equity value had increased from 0 to R1 billion.

“Those negotiations continued for the latter part of last year and this year. However, we came to a point where there were other issues, where there (was) no meetings of minds. For example, the exemption of the new entity in terms of paying rental for the property they would utilise in that process,” said Gordhan.

“Later last week, which is what we put before Cabinet today, where in terms of the clause on the old sale and purchase agreement whereby mutual consent this transaction can be terminated. That clause was put into action.”

Both parties agreed there was no clear path forward in terms of the Takatso-SAA deal.

He said that there must be fair value for SAA. They must ensure public interest was secured in terms of value, and that SAA must be left in a more sustainable condition than in 2019.

He said SAA currently had 19 routes and would be in a position to function properly.