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SAA was placed in business rescue in December 2019 (supplied)
SAA has received the interest of several private equity partners and a transaction adviser has been appointed to participate in a process that could conclude in December this year or early 2021, Public Business Minister Pravin Gordhan said.
The minister responded on Wednesday to questions posed by members of Parliament. DA MP Ghaleb Cachalia had requested details on the expression of interest from the private equity partners.
“We have received a considerable number of expressions of interest from various financial institutions, private equity partners and airline operators,” Gordhan said.
The transaction advisor is evaluating and interacting with the parties. “The process is an advanced stage,” the minister told the deputies. Once the process is completed, the results will be communicated, he assured.
The national airline was placed on corporate bailout in December 2019 when it faced a liquidity crisis.
During the presentation of the medium-term budget policy statement, Finance Minister Tito Mboweni said that 10.5 billion rand would be made available to the SAA to support the process.
Both Mboweni and Gordhan have defended the decision amid criticism from opposition parties, as the funding of national departments and their public entities had to be re-prioritized, as well as conditional grants from provincial and local governments.
Gordhan has said the money would be used to reimburse the consumer for missed tickets, creditors and employment-related costs. He reiterated statements that the liquidation would not be ideal.
“It should be noted that SAA has a very credible reputation both on the African continent and globally. It is an attractive proposition,” Gordhan said.
However, potential private equity partners have made it clear that they will not bear debt or restructuring costs, he explained.
“It is up to the government to make sure all obligations are paid, including SAA’s restructuring costs.”
He added that discussions are underway for SAA’s transition from the trade bailout.
