SAA said to consider share sale

SA Airways (SAA) could sell shares to the public as the stateowned carrier seeks ways to end years of losses and reduce the need for bailouts, according to people familiar with the matter.

The move would enable the government to cut its stake in much the same way as it did with former phone monopoly Telkom almost two decades ago, said the people, who asked not to be named. However, the carrier would first need to make progress with a turnaround plan designed to reach break-even in three years, they said.

While the sale of a stake to an equity partner has been aired repeatedly over the years, this is the first time it’s been suggested that SAA should list on a stock-exchange. Telkom’s initial public offering in 2003 raised almost R7.1 million ($500 million) and the government’s shareholding is now just under 40%. SAA declined to comment. The airline’s CEO, Vuyani Jarana, is facing renewed pressure from his bosses in government, which last month put aside R5 billion to help SAA repay debt.

Last week, Finance Minister Tito Mboweni said it was his preference to shut down the carrier, rather than continue to stretch state finances, while his counterpart at the department of public enterprises, Pravin Gordhan, warned on Monday that “radical things need to be done” for the airline to survive.

More immediate plans than the share sale include holding discussions with potential commercial joint-venture partners, including Air Mauritius, one of the people said. That could lead to cost savings on routes to the Asian-Pacific market as the airlines would share operating costs.

Nigeria flights

SAA will also consider a resumption of flights to Abuja, the Nigerian capital, which it abandoned last year, the person said. The carrier would apply for a local licence, or find a partner to help Nigerians travel to the US. – Bloomberg

Moneyweb

Awatershed judgment in the High Court in Pretoria on Thursday will make it more difficult for mining groups to obtain licences in environmentally sensitive areas.

The court set aside decisions to allow coal mining in a protected wetland area in Mpumalanga, made by the environmental affairs and mineral resources ministers. It instructed the ministers to comply with the Promotion of Administrative Justice Act (Paja) and consider local communities’ interests and environmental principles before granting mining permissions.

Judge Norman Davis’ judgment goes a long way to establishing the boundaries of state power.

Catherine Horsfield, attorney for the Centre for Environmental Rights (CER), which represented the environmental groups, said:

The move would enable government to cut its stake in the same way as it did with Telkom almost two decades ago.

One of the people