Govt seeks SAA partners

The government isn’t just in talks with potential buyers of a stake in the country’s insolvent state-owned airline, it’s also seeking partners for subsidiaries such as low-cost airline Mango and catering unit Air Chefs.

The result will be a number of private-sector entities working with various parts of SA Airways whenever it resumes operations, according to Public Enterprises Minister Pravin Gordhan.

The government had 31 expressions of interest in SAA and are currently whittling down the list, he said.

“At the moment we are not actually looking to raise a specific amount from the strategic-equity partners but rather the viability of their proposals,” he said in a phone interview.

“We will only discuss numbers in January.”

The search for a partner for SAA is central to Gordhan’s plan to revive the airline a year after the company went into business rescue and nine months since it last operated a commercial flight.

But the process has dragged on since at least the start of May, and the funds needed to resume flights and pay worker-severance packages remains elusive.

Finance Minister Tito Mboweni allocated R10.5 billion to the airline in October, but SAA’s business rescue practitioners say only R1.5 billion has been transferred and with conditions attached that breached certain regulations.

“The conditions that were stipulated for how it should be spent are in contravention of both the Labour Relations Act and the Chapter 6 of Companies Act,” the administrators said in a statement sent to Bloomberg, adding they were unable to utilise the funds until the conditions have been amended.”

Gordhan said: “It has been slow progress. The challenge is that the money is coming in tranches and we have to ensure that all obligations in terms of the Companies Act are met.”

Regarding employees, ab800 of which are owed severance packages, Gordhan would only say the matter is being discussed with labour unions and would be “settled soon.”