‘Takatso negotiated hard for 51% stake at SAA’, says deputy minister

‘Takatso negotiated hard for 51% stake at SAA’, says deputy minister

Deputy Minister of Public Enterprises Obed Bapela said they believe South African Airways (SAA) would remain sustainable going forward, despite the scrapping of the deal with Takatso consortium.

Bapela also revealed that government wanted to sell 40% of SAA to Takatso and keep 60%, but because of the trouble it was in, Takatso negotiated hard for a majority stake in the airline.

New valuations led to the deal to be called off between the two parties and this was given the go-ahead by Cabinet.

The deputy minister said when the new administration takes over after the May elections it would be able to handle the issue, but SAA will remain operational for the next 18 months.

There was no doubt it would be sustainable, said Bapela, adding that the airline will not receive bailouts from government.

Bapela joined ministers in the economics cluster on Wednesday in Parliament to answer questions.

However, he said they did not want to privatise SAA, but sell a stake to Takatso because of the conditions at the time.

“Privatisation is not policy of the [African National Congress] ANC. Even the sale of SAA for private people to take 51% was because of the conditions that existed at the time, where the airline was under business rescue,” said Bapela.

“When the negotiations took place the bidder was Takatso and they negotiated very hard to say either we take 51% and you take 49% or the deal if off and that was the only available bidder at the time,” he said.

“The department’s request was 60% for the state and 40% for an equity partner, but that could not be achieved because the airline was in trouble, grounded and almost in liquidation. Therefore, privatisation was not our first option.”

He said the details of the deal were kept under wraps because the documents were commercially sensitivity.

They did not want competitors of the airline to look at the confidential information.

But members of the portfolio committee on public enterprises had access to the documents.

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