The minority shareholders in the Takatso Consortium bidding for a 51% share in South African Airways (SA, Johannesburg O.R. Tambo) have agreed to sell their stake to comply with the country's Competition Commission recommendations.

This has been confirmed to ch-aviation by industry veteran Gidon Novick, who represents ACMI-specialist Global Aviation Operations (GE, Johannesburg O.R. Tambo) and management consultancy Syranix. "We don't want to be a spanner in the works holding back really important privatisation," he said. He denied the minority party had bowed to political pressure to divest. Financial advisors would coordinate with potential buyers, he added.

The minority shareholders previously dug in their heels, saying they had not agreed to divest from the consortium, which also includes majority shareholder and black empowerment asset management firm Harith General Partners. The departure of the minority group was a condition set by the regulator for the conclusion of the privatisation deal, which has dragged on for more than two years. Last month, Global and Syranix said they would challenge their sidelining before the rule-making Competition Tribunal.

As reported, the recommendation by the Competition Commission - which advises the Tribunal - was based on a perceived conflict of interest in that Global and Syranix operate the Lift Airlines brand, which competes domestically with SAA. The minority shareholders were increasingly cut out of negotiations with Novick resigning as Takatso CEO and director because he was not being kept informed about the financing and could no longer fulfil his fiduciary duties.

News24 reports that an international investment bank has been appointed to investigate potential buyers and evaluate SAA's assets. The financial advisor would assess the market for potential buyers, confirm the business's fair value, and assist with the legal process. "It's a pity. We really wanted to play a meaningful role in a successful privatisation in this country," Novick said.

Takatso is to invest ZAR3 billion rand (USD164 million) over three years in operational capital, but questions have been asked about plans to raise the funding. Under the privatisation transaction, the government must cover SAA's legacy debt, which reportedly still sits at ZAR1.5 billion (USD82 million).

A Competition Tribunal hearing is expected to take place later this month.