- The due diligence process for Takatso to buy 51% of SAA is now complete, the consortium says.
- It said that no material issues were identified in the deal.
- Minister of Public Enterprises Pravin Gordhan expects the deal to be finalised early next year.
South African Airways' chosen strategic equity partner, the Takatso Consortium has confirmed that the due diligence process to buy a 51% stake in the state-owned flag carrier is now complete and no material issues were identified.
SAA, which was in business rescue from December 2019 to April 2021, started domestic commercial flights again on 23 September. The state-owned airline stopped commercial flights in May last year when the rescue practitioners indicated that there were insufficient funds to continue with commercial operations.
According to Takatso, which consists of Global Airways, which owns low-cost airline LIFT, and infrastructure investment firm Harith, it is not yet involved in the running of SAA. The consortium says negotiations with SAA's shareholder, the Department of Public Enterprises (DPE) are continuing.
By mid-August this year, the DPE said due diligence regarding Takatso was at "an advanced stage" and should be completed "in the next week or so". At the end of August, Takatso said the due diligence process was "substantially complete".
"The transaction is a large and complex one, and the parties are committed to concluding the deal in a timely manner," Takatso told Fin24 on Sunday. It is expected that Takatso would have to invest about R3 billion in SAA over a period of three years to enable sustainability.
There have been concerns about the ability to raise the finance for the consortium, but Harith founder and Takatso chair Tshepo Mahloele told Fin24 in August that he was "pretty comfortable" in the group's ability to secure it.
Minister of Public Enterprises Pravin Gordhan told Bloomberg Television on Friday that government expects to conclude the Takatso deal early next year.
"There are a few more regulatory hoops that we have to jump through," said Gordhan.
Last week SAA and Kenya Airways signed a strategic partnership framework, which they regard as a milestone towards co-starting a Pan-African airline group by 2023. The two airlines will work together to increase passenger traffic, cargo opportunities, and general trade in South Africa, Kenya, and the rest of Africa.
It is also expected that the Kenya Airways partnership will improve the financial viability of the two airlines, while, at the same time, offering competitive prices for both the passenger and cargo segments.
Meanwhile, a new amended proposed business rescue plan for SAA's subsidiary Mango was published last week. It places all hope for the low-cost airline to return to the skies on finding a private investor.
Some aviation insiders claim that Takatso partner Global is waiting for Mango to be "out of the way" before finalising the SAA deal and thus paving the way for LIFT to step in. Global has denied this being the case.