- The Department of Public Enterprises says it has been transparent in communicating the milestones in the process of announce the preferred equity partner to buy a majority stake in SAA.
- There has been confusion around the due diligence process with the Takatso consortium, and President Cyril Ramaphosa says the deal is not yet done.
- One of the threats to the deal is the relationship between key consortium company Harith and the PIC, and the scathing findings against it by the Mpati commission.
In the wake of President Cyril Ramaphosa’s comment that the Takatso consortium’s purchase of a majority stake of SAA is not a done deal and could still unravel, the Department of Public Enterprises (DPE) has sought to clarify where the process is actually at.
"The announcement [of the consortium] followed a rigorous, year-long process undertaken by [the] DPE to identify a suitable SEP [strategic equity partner] for SAA. This process commenced whilst SAA was under the control of the business rescue practitioners," the department said in a statement on Thursday.
"The ministry has been transparent in communicating the milestones in the process to announce the preferred SEP for SAA."
Two weeks ago, Public Enterprises Minister Pravin Gordhan announced that the Takatso consortium of Harith General Partners and Global Aviation was government’s preferred equity partner, with a proposed 51% stake in SAA, and the state retaining 49%.
Confusion around the process of due diligence with the deal started when the department issued a statement last week saying that "after undertaking the due diligence on Takatso, the department is satisfied that the consortium has the necessary assets, infrastructure and financial resources including the required technical and operational expertise".
However, according to Ramaphosa’s comments on Tuesday, a longer due diligence process was still ongoing - where the consortium and SAA were delving into the finer details of each other. He was emphatic that the deal was not completed.
"There is no deal. Due diligence means that you want to look at everything closely to see whether the various conditions and the various parameters that you have will indeed be fulfilled," Ramaphosa said.
"Due diligence, by its very nature and definition, looks more closely at the company and the partner, and a whole number of things can be unravelled."
The DPE said on Thursday that Ramaphosa’s comments had not contradicted anything it said previously.
It laid out the process, saying that this included the receipt of more than 30 expressions of interest for SAA and its subsidiaries, the appointment of transaction advisor to independently assess these, prepare and then evaluate a shortlist. The preferred candidate would then be chosen.
"This will be followed by a due diligence process. Firstly, by the department into the consortium. Secondly, by the consortium into SAA," the DPE said. This process of due diligence is currently under way.
This process involves obtaining "all the required approvals and conclude all the legal agreements necessary to consummate this partnership".
After this "a purchase and sale agreement will be negotiated and signed".
As mentioned by Ramaphosa, the process could unravel, and one of the things that threatens that is the relationship between Harith and the Public Investment Corporation (PIC) – and more specifically the scathing findings against by the Mpati commission, which was tasked with investigating the state-owned asset manager.
The commission recommended a probe into Harith’s relationship with the PIC and into Mahloele himself. The PIC says "work is currently under way" into implementing this recommendation.
But earlier this week, the UDM's Bantu Holomisa says his party will go to court to challenge Harith's involvement in the SAA deal - given the commission's finding against Harith.
On the other hand, Harith has accused Holomisa of a pattern of defaming Harith with "baseless claims".