South Africa has agreed to sell the federal government’s majority stake in the cash-strapped national airlines, the South African Airways (SAA), to a consortium that includes a local private equity firm and a jet leasing company.
South Africa has agreed to sell the federal government’s majority stake in the cash-strapped national airlines, the South African Airways (SAA), to a consortium that includes a local private equity firm and a jet leasing company, the country’s public enterprises minister Pravin Gordhan informed on Friday. The SAA, the second-largest airline in the entire continent, was grounded in December last year and had since been a drain on state finances, news agencies reported.
The SAA, despite being one of the largest airlines in Africa — second only to the Ethiopian Airlines — had not turned in a profit since 2011. It was placed under a state-approved rescue plan in December 2019 to save it from collapse, AFP reported, adding that the airline was one of the many symbols of “the mismanagement of state-owned enterprises” that characterised ex-South African president Jacob Zuma’s regime. The airlines was having a hard time surviving even way before the coronavirus disease (Covid-19) pandemic, only managing to survive on state bailouts.
“Having evaluated the current environment, the government has agreed to the (strategic equity partner) owning of 51% of the shareholding and government 49%,” South Africa’s public enterprises minister Pravin Gordhan said in an online media conference.
The consortium to which South Africa is selling its national airlines comprises of private-equity firm Harith General Partners, an investor in African infrastructure and airports, and Johannesburg-based airline management and leasing firm Global Airways, which owns the recently launched domestic budget airline LIFT. The consortium will own the majority 51% share while the government will retain the minority 49% stakes in the shareholding, the minister informed, adding that the new SAA will not be “dependent” on the government.
Source: Aviation Pros