New beginnings for SAA but no new name, and govt still keeps a (smaller) share

accreditation
0:00
play article
Subscribers can listen to this article
For Yunus Carrim (ANC)  there are "many forms of mixed ownership in the modern era".
For Yunus Carrim (ANC) there are "many forms of mixed ownership in the modern era".
  • Government will likely keep a percentage of its shareholding in SAA.
  • The airline is also likely to keep its name.
  • Negotiations with a potential strategic equity partner are at an advanced stage and a due diligence process could be complete in the next six to eight weeks.. 


SAA will likely keep flying under its name and government will retain a "certain percentage" of its shareholding, a joint meeting of the National Council of Provinces' Select Committee on Appropriations and Select Committee on Public Enterprises and Communications heard on Wednesday.

The Department of Public Enterprises and Treasury gave a briefing on the future of the airline, which exited business rescue at the end of April.

"There is no intention of having SAA fly under any other name," said Deputy Minister of Public Enterprises Phumulo Masualle.

Advocate Melanchton Makobe, acting director-general of the Department of Public Enterprises (DPE), added that a strategic equity partner for the airline would not be taking over the whole of the shareholding in the state-owned airline.

Government will retain "a certain percentage", said Makobe.

Negotiations with a potential strategic equity partner are at an advanced stage and a due diligence process could be complete in the next six to eight weeks.

Both Makobe and Masualle said the strategic equity partner would need to help with both finances and expertise that may have been lost at the airline over time. According to Masualle, the partner would bring "that which is not accessible via the public sector at the moment".

The briefing was met with mixed reactions.

NCOP member Yunus Carrim (ANC) said there was no need to "polarise" ownership of the airline, arguing that there are "many forms of mixed ownership in the modern era".

"Why are we polarising the issue of ownership of SAA? I don't think it has to be either [entirely] state-owned or private. A national airline is strategic, especially in a developing country. If you hand it over entirely to the private sector, then it becomes just about profits," said Carrim.

But he added that it was important to consider "moral and other capital" SAA has lost and the expectation that the airline might battle to win back market share once it returns to the skies.

"It would be foolhardy not to learn lessons from the state ownership of SAA up to now, but we should not go to the opposite extreme of a [majority] equity partnership - foreign presumably. I think SAA is too important an asset to give to the private sector. It must be run in terms of market standards, though, and be very commercially viable," said Carrim.

NCOP member Willie Aucamp (DA) argued for privatisation, saying this could ensure the airline was better managed, while Andrew Arnolds (EFF) said it was important to ensure money allocated for SAA and its subsidiaries was not wasted. And if it is wasted, there must be consequences.

Treasury's deputy director-general of assets and liabilities Tshepiso Moahloli said it was "comforting" that a strategic equity partner was on the horizon.

"SAA's interim board must work with the shareholder to ensure the reputational harm done for past period when SAA could not honour its obligations and was in the news for all the wrong things, is repaired so that it is set on a path where it can again be a trusted airline," said Moahloli.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.35
-0.0%
Rand - Pound
19.81
-0.0%
Rand - Euro
17.08
-0.0%
Rand - Aus dollar
10.76
-0.0%
Rand - Yen
0.13
-0.0%
Gold
1,764.62
0.0%
Silver
25.81
0.0%
Palladium
2,467.49
0.0%
Platinum
1,038.50
0.0%
Brent Crude
73.51
+0.6%
Top 40
59,504
-1.5%
All Share
65,635
-1.4%
Resource 10
60,958
-1.7%
Industrial 25
87,956
-1.3%
Financial 15
12,995
-2.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Should government have assigned a majority shareholding in SAA to the private sector?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, It's a good decision
62% - 123 votes
Not a good move
10% - 20 votes
Too early to tell
27% - 54 votes
Vote