South Africa’s deal to sell a majority stake in state-owned carrier, South African Airways, has collapsed after three years of negotiations.
In a statement released by the South African Ministry of Public Enterprises (DPE) on March 14, 2024, Minister of Public Enterprises, Pravin Gordhan confirmed that “the transaction to dispose of the state’s 51% shareholding in SAA has been terminated by mutual consent”.
The deal originates from June 11, 2021, when the Takatso Consortium was named as the airline’s new Strategic Equity Partner (SEP). The SEP would privately own a 51% stake in SAA while the South African government would hold the remaining 49%. It was agreed that the government would retain a 33% non-dilutable ‘golden share’ of the SAA voting rights.
However, prior to the deal SAA faced a turbulent period which led the airline to enter into business rescue proceedings on December 6, 2019, in a bid to restructure due to financial difficulties. This was shortly followed by a locking down of the country in March 2020 in response to the COVID-19 pandemic.
SAA resumed operations in September 2021 with an improved operational capacity which encouraged the DPE to request a new valuation of the airline.
“After the DPE requested that a new valuation of SAA be undertaken given the passage of time and vastly improvement economic and market conditions the DPE and Takatso were not able to agree on a revised transaction structure,” the DPE statement continued. “DPE will continue to work closely with the SAA Board to create a viable path forward.”
On December 18, 2023, SunExpress and South African Airways (SAA) signed a Memorandum of Understanding (MoU) extending and expanding their current partnership agreement. The Turkish-German airline agreed to place two additional aircraft with South Africa for the 2024/25 winter season, bringing the total number of aircraft leased to South African Airways to four.