Public Enterprises Minister Pravin Gordhan says the sale of shares in South African Airways (SAA) was aimed at ensuring that the State-owned airline is saved and does not undergo liquidation.<\/P>
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Gordhan was addressing Parliament\u2019s Standing Committee on Public Accounts (SCOPA) on Tuesday.<\/P>
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A Strategic Equity Partnership with Takatso Consortium is expected to pave the way for the sale of some 51% of the airline\u2019s shares, pending regulatory and other approvals.<\/P>
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Gordhan told the committee that government\u2019s fiscal position does not allow for SAA to continue being funded purely from the public purse. He, however, said that government will still hold a strong stake in the airline.<\/P>
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\u201cThe reality is that there are going to be times when the State doesn\u2019t have all the funding to manage whatever it is holding on to or provide additional investment for a particular entity, enterprise or business to actually grow.<\/P>
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\u201cSo this is not privatisation in the sense that we are not selling 100%. Firstly, we\u2019ve got 49%. Secondly, we\u2019ve got the golden share and the golden share means we own the brand, and headquarters [are] in South Africa. Transformation of the staff and management will take place. All of that is prescribed in the purchase and sale agreement.<\/P>
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\u201cWe do not have the financial capacity to hold onto everything as the State but our intention was never to privatise. Our intention was to save the airline. Our intention was to avoid liquidation because then everything would have been sold to the private sector. So this was ultimately the best that was possible within the limitations that we had,\u201d he said.<\/P>
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The Minister explained government\u2019s reasons for seeking out a Strategic Equity Partner for the airline.<\/P>
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\u201cThe additional partner is required in order to put in money which will enable the airline to expand\u2026 in a systematic way, based on commercial criteria and a reasonable chance of success of those routes paying back\u2026 its own cost for a start, let alone the profits it would make.<\/P>
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\u201cThe issue is not the current way of operating. The issue is the future growth,\u201d he said.<\/P>
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Answering questions on the consortium\u2019s ability to invest some R3 billion into the airline, Gordhan said there is no reason to doubt that it will not honour that agreement.<\/P>
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\u201cWe, at this point in time, have no reason to doubt Takatso\u2019s bona fides. We believe that they will deliver cash when it is required and that they will have to solve their own problems, in terms of their own minority shareholders.<\/P>
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\u201cIn terms of timelines, the Competition Commission process took about 10 months. The competition tribunal is set for the third week of June\u2026and then there are a few regulation hoops to cross. I imagine that by the end of July\/August, we should have completed all the regulatory requirements.\u201d<\/P>
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The Minister said although the aviation industry has endured a challenging period as a result of the COVID-19 pandemic, the sector is recovering.<\/P>
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\u201cToday we find ourselves in a position where at least there\u2019s some more competition in the aviation industry, locally particularly.<\/P>
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\u201cAs SAA grows and the acquisition of the Strategic Equity Partner is concluded, we will have even more effective competition as well. The beneficiary at the end of the day will be the traveling consumer more than anybody else,\u201d he said. \u2013 SAnews.gov.za<\/P>
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Source: South African Government News Agency<\/P>
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Public Enterprises Minister Pravin Gordhan says the sale of shares in South African Airways (SAA) was aimed at ensuring that the State-owned airline is saved and does not undergo liquidation.Gordhan was addressing Parliament\u2019s Standing Committee on Pub…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[177],"tags":[],"yoast_head":"\n