The Department of Public Enterprises and South African Airways said yesterday that all regulatory hurdles to the R3 billion Takatso Consortium deal, as the new majority stakeholder in the national carrier, should be cleared by March.
This was heard at the presentation of the much delayed SAA’s results for the 2017/2018 year that were put on halt after the airline went into a tailspin, which culminated in the business rescue process.
Acting director general in the Department of Public Enterprises Jacky Molisane; deputy director general Melanchton Makobe; and SAA’s interim chief financial officer, Fikile Mhlontlo, told Parliament’s Public Enterprises Committee that the government had done sufficient due diligence on Takatso’s financial capability.
They said the only reason for the delay in the deal was the clearance of the regulatory hurdles which should be done by the last quarter of the fiscal year in 2023.
Regulatory hurdles included the Competition Commission, the Competition Tribunal and the Air Services Council Licensing Authority.
“They have the money. In fact, they want this done sooner than later. We are waiting for the approvals and the regulatory hurdles, thereafter, there will be a change of ownership,” Molisane said.
Parliamentarians drilled down on the current proposed deal with the Takatso Consortium, which they pointed out had to require amendments after the consortium had reneged on financial capacity and timelines.
They pointed out the matter of Toto Holdings, which is still pending.
Toto launched a legal challenge and interdict to clarify the choice of Takatso as a strategic partner as it felt the processes had been skewered in the consortium’s favour. This matter was before the courts, it would be pronounced on later this month.
Molesane, explaining to Parliament’s concerns about the status of the airline if Takatso fell through, said, “If the deal falls through, if the government cannot put money in SAA, then the option we have all worked hard to avoid would have to be taken and that is the liquidation of SAA.“
She said the airline was still awaiting the R3bn balance out of a R13.5bn subvention to deal with liabilities and concurrent creditors to complete the implementation of the business plan.
“All entities have indicated they did not want to take any historical liabilities. National Treasury is not pulling out of the process,” she said.
Parliamentarians acknowledged the SAA financial report was five-years overdue.
SAA financial results for the subsequent years to the current one were still being scrutinised by the Auditor-General with a likelihood of their presentation at the end of the fiscal year.
Mhlontlo said for the 2017/2018 financial period, SAA made a R5.4bn loss. The airline was recapitalised to the tune of R10bn by the government, with R7.4bn going to service debt, while R2.6bn was held back for working capital.
In that year, SAA had a R29bn turnover with operating costs at R32bn, while earnings before interest, tax, depreciation and amortisation of R2.6bn.
Mhlontlo said various interventions had been implemented at the airline, which included key appointments made to plug the critical skills gap, the revised long-term turnaround strategy adopted and the restructuring programme drawn.
“The interventions were implemented unfortunately at a time when there were weak governance structure at SAA coupled with State Capture. Its consequences were laid bare by the Zondo Commission report,” Mhlontlo said.
BUSINESS REPORT