- State-owned SA Express has not been sold nor an agreement concluded for a sale.
- Only a preferred bidder has been announced to the Department of Public Enterprises and the creditors for consideration and inputs.
- SA Express was placed under provisional liquidation on 29 April 2020 after its business rescue process failed.
SA Express has not been sold yet nor has there been a sale agreement concluded, the state-owned regional airline's provisional liquidator Aviwe Ndyamara cautioned on Friday. He points out that only a preferred bidder has been announced to both the shareholder (the Department of Public Enterprises) and the body of creditors for consideration and inputs.
An equity crowdsourcing proposal by a group called Fly SAX, backed by some employees, has been selected as the preferred bid to save regional airline SA Express from liquidation. This comes after the airline's provisional liquidators concluded their process of due diligence on the 17 expressions of interest in the group.
"There are on-going discussions regarding the conclusion of a sale agreement and approval of the bidder by the shareholder. The outcome of the discussions will be communicated in due course," Ndyamara says in a statement to creditors.
SA Express was placed under provisional liquidation on 29 April 2020 after its business rescue process failed. The joint provisional liquidators, appointed on 15 May, started to execute on their fiduciary duties by engaging creditors and affected parties. They also took control of the assets of the airline and investigated the company affairs, taking into account the access restrictions to the premises and the further complications brought by the level 5 lockdown regulations, according to Ndyamara.
On 25 June 2020, the joint provisional liquidators advertised an expression of interest and or a sales process. The objective was to seek either further investment in the airline or procure offers for the purchase of the airline’s assets.
The preferred bidder that complied with all the terms and conditions was announced as being Fly SAX to both the shareholders and the company's body of creditors.
The purchase price for the Fly SAX bid is R50 million, payable in the form of a bank guarantee to be provided to the joint liquidators. The letter to creditors does not state by when such a guarantee must be provided.
The idea is to offer an investment opportunity in SA Express to retail investors through a public offering. Uprise Africa, an "equity crowdfunding" platform that allows investors from around the world to invest capital into South African businesses in exchange for equity shares, is facilitating the process. The CEO of Uprise Africa is Tabassum Qadir, the former co-chair of grounded low-cost SA airline Skywise.
The retail investors will not be subscribing for shares directly in Fly SAX, which is a private company and is not permitted by law to offer its shares to the public. The Uprise Africa Fund is an unlisted public company and will subscribe for shares in Fly SAX by means of the funding raised in this offering. The Uprise Africa Fund will in turn issue shares in itself to investors, and these shares will be economically linked to SA Express.
Government gave SA Express more than R1.2 billion in urgent financial support for the 2019/2020 financial year. The DPE, meanwhile, has in the past acknowledged that mismanagement took place at the airline.
For example, on Thursday the Zondo Commission into state capture heard evidence of the North West government opting for SA Express to provide air services to the province at an estimated R110 million cost to subsidise it in the first year alone. This was despite the second highest proposal stipulated that it would cost the provincial government only R4.7 million.