Public Enterprises Minister Pravin Gordhan has maintained that the price of South African Airways (SAA) shares to be bought by the strategic equity partner Takatso Consortium will be determined through negotiations and upon valuation of the shares.
Gordhan revealed this when he was responding to parliamentary questions from DA MP Alf Lees, who asked about the SAA-Takatso Consortium deal that is shrouded in secrecy.
Among Lees’s questions was whether the Rand Merchant Bank (RMB) as a transaction adviser included Takatso on the shortlist of suitable purchasers of SAA shares.
Lees also asked whether Takatso provided any guarantee and the purpose of conducting the valuation of SAA, among other things.
Gordhan said when RMB assessed and evaluated the expression of interest of potential strategic equity partners (SEP), none had an offer that could be accepted by his department.
A proposal by Harith General Partners, which had been engaged in the RMB process and Global Aviation, which later became the Takatso consortium, was made to the department together with other proposals.
“After evaluating the proposals, Takatso was then appointed as the preferred SEP.
“Takatso had the requisite combination of financial and operational capabilities required for the successful relaunch of SAA. Their composition would advance the transformation agenda,” he said.
Gordhan said that two valuations of SAA were undertaken in 2020 and 2021.
“Given that Takatso was selected as the preferred partner in June 2021 and more than two years have elapsed since, another valuation of SAA is prudent to ensure alignment with prevailing market conditions, for an updated and equitable value for the state. In light of this, the Department of Public Enterprises has initiated a new valuation to accurately ascertain the company's present status and prospective worth in the existing market environment.”
He added that Takatso has agreed to meet SAA’s working capital requirements.
“An initial funding of R3 billion is projected for SAA’s growth path leading to stability. All financial obligations will be borne by Takatso, absolving the government of further funding support,” he said.
“The fulfilment of this financial commitment by Takatso is critical as without it, the transaction cannot be concluded. The price that Takatso will pay for the 51% stake in SAA will be determined through negotiations, taking into account the updated valuation of the 51% share.This ensures that the settled amount accurately reflects the current worth of the stake, providing a fair transaction for both parties involved,” he said.
The minister also said the public and Parliament would be informed of all details once all processes have been concluded.
Lees told the Cape Times that Gordhan’s reply did not provide the full clarity required, especially the process followed to get Takatso appointed as the private partner.
“There is a bland statement that other proposals from interested parties were received after the RMB process had been terminated but who the other interested parties were and what the details of the various offers were is simply not given. A complete lack of transparency by Pravin Gordhan has been his obfuscation throughout the process of selecting a private shareholder for SAA,” he said.
Lees also said the question on the R3bn to be provided by Takatso had not been replied to and it seemed clear that no such guarantees had been provided by Takatso.
Cape Times