The South African government expects to finally conclude the long-winded semi-privatisation deal of South African Airways (SA, Johannesburg O.R. Tambo) in the next four months, according to newly-appointed interim chairman Derek Hanekom.
A former Minister of Tourism, Hanekom told South Africa's News24 it was premature for him to comment on the pending 51% sale of SAA to the Takatso Consortium, the government's preferred strategic equity partner, but said Public Enterprises Minister Pravin Gordhan had indicated the transaction would be concluded within four months. "I can't comment on the Takatso deal. Minister Gordhan indicated that he expects it to be concluded in the not-too-distant future. He is confident that it means within the next four months," Hanekom said following the appointment on April 15 of a new interim board that will serve until the introduction of the Takatso Consortium.
Announcing the board on April 17, Gordhan said its primary focus was to provide strategic leadership to the transitional management team and oversee the integration of the Takatso Consortium. The deal - first announced almost three years ago - is still under regulatory review. According to Treasury disclosures to a parliamentary oversight committee on February 17, two outstanding issues are holding up the deal: outstanding liabilities to concurrent creditors and unflown ticket liabilities. The latest ZAR1 billion rand (USD55.1 million) allocation to SAA in the 2023 budget is geared toward clearing these legacy debts. A receivership - created on July 1, 2021, after SAA existed business rescue - will handle the distribution of all payments to creditors by August 2023. Takatso will not take on any legacy debt but plans to inject ZAR3 billion (USD166 million) in working capital into SAA over three years.
Meanwhile, Gordhan said, the interim board would tackle critical priorities, including implementing cost-saving measures, expanding route networks, improving customer service, and expediting all regulatory preparations to ensure a seamless transition as the Takatso Consortium assumed its role as the majority shareholder.
The new board also comprises the following interim non-executive directors: chartered accountants Fathima Gany and Clarissa Appana; former Airports Company of South Africa (ACSA) Chief Operating Officer Fundi Sithebe; finance and business strategist Mahlubi Mazwi; corporate lawyer Johannes Weapond; economist Dumisani Sangweni; and SAA interim Chief Executive Officer John Lamola.
The timing of the appointment of the new interim board has drawn sharp criticism. Trade union NUMSA (National Unions of Metalworkers of South Africa) said it was "deeply suspicious of the timing" which "stank of corruption", noting that Gordhan gave no reasons for replacing the board. NUMSA also questioned why it was necessary to replace one interim board with another; why this happened during an audit of the airline; and why the details of the Takatso deal continued to be shrouded in secrecy.
Suspended Department of Public Enterprises Director-General Kgathatso Tlhakudi claimed the new interim board was appointed to "rubber stamp" the Takatso deal because the previous board was less compliant and had raised doubts about the transaction. Thlakudi also claimed SAA was deliberately under-valued by ZAR7 billion (USD388 million), so it could be sold for as little as possible to Takatso. In a letter to Parliament, Gordhan denied these allegations and claimed Tlhakudi was trying to dodge disciplinary proceedings for misconduct for allegedly interfering in a recruitment process.
Meanwhile, the opposition Democratic Alliance (DA) remained sceptical that Hanekom could address the existing impasse with Takatso without asking for more state bailouts. "SAA is playing in an increasingly competitive environment, and the longer it takes to get the Takatso deal going while busy changing the deck chairs will increase the chances of failure and more bailouts from a fiscus that is already stretched to the limit," the DA warned.
