Revamped SAA draws strategic investor interest

SA AIRWAYS downsizing and its subsidiary companies continue to attract interest from strategic equity partners as the state-owned airline plans to relaunch early next year.

The government said yesterday that it had received more unsolicited expressions of interest from private sector funders, private equity investors and partners in a restructured SAA.

The national carrier needs at least R10 billion to resume operations.

Of more interest to investors are SAA’s subsidiaries: in-flight catering service Air Chefs, maintenance services wing SAA Technical, and low-cost carrier Mango Airlines.

The Department of Public Enterprises (DPE) said it had received more than 10 unsolicited expressions of interest in SAA at the beginning of the month.

“The DPE welcomes the attraction of a mix of local and international investor groups to provide the new airline with technical, financial and operational expertise to ensure significant South African ownership, while diversifying the investor base,” it said yesterday.

SAA has been grounded since the start of the lockdown-enforced travel ban at the end of March.

The airline was undergoing a business rescue process that was approved at the end of June and finalised last month. The restructured SAA will retain 1 000 employees of the almost 5 000 previously employed.

More than 3 000 employees have applied for voluntary severance packages and 1 000 will be placed on a lay-off scheme.

The restructured SAA is expected to launch in January next year.

DPE director-general Kgathatso Tlhakudi said last week that a team from the department and advisers from Rand Merchant Bank had begun negotiations after receiving four promising SAA proposals.

The department said it had been assessing the unsolicited expressions of interest from several local and international strategic equity partners as part of implementing the business rescue plan.

It said such investments in SAA would help to support key economic sectors, including tourism, and solidify South Africa as an African gateway to global markets.

“Such partnerships will also improve scale and scope, and ensure continuity of value creation to the South African economy and long-term sustainability of the aviation industry managed by competent, competitive and skilled personnel who possess strategic and technical capabilities, which are critical to the success of the new carrier,” the department said.