Johannesburg – Employees of embattled state-owned airline South African Express Airways (SA Express) have been dealt a heavy blow after Harith General Partners pulled out of a deal to buy the entity, opting instead to invest in South African Airways (SAA).
A special-purpose entity comprising former employees of SA Express – Fly SAX – is up in arms following the withdrawal of Harith from the deal, leaving it with a little more than a week to come up with the money to rescue the airline.
Fly SAX, which was accepted as preferred SA Express bidder last year, said it was unhappy about how Harith dealt with the matter, only for it to invest in SAA.
Thabsile Sikakane, Fly SAX’s spokesperson, hit out at Harith and said the entity was now exploring its options.
“While the letter of commitment is still valid until 30th June 2021; provisional liquidators have been accusing Fly SAX for the non-performance, which is unfair as Fly SAX is a consortium of ex-employees who have no financial resources and had submitted the bid with plans to equity crowdfund, but due to the letter of commitment given from Harith General Partners chose to take the private funding option,” she said.
“We cannot and will not accept this backtracking by Harith should the provisional liquidators pursue to hold Fly SAX responsible for nonrepudiation to the first binding offer. Fly SAX has fought very hard for this airline to be saved and what has happened to us is very painful. We should not be denied the opportunity to take SAX [SA Express] to the sky again, because of opportunistic businessmen.”
SA Express was placed under provisional liquidation in April last year after its business rescue process failed. Harith made news last week when the government announced that a consortium, of which it is part, will take over a majority interest in SAA.
The government will own 49% of the new South African airline, while the Takatso Consortium, comprising Global Aviation and Harith General Partners, will own 51%.
Khaya Buthelezi, the head of business development at Harith, confirmed that the company would no longer be pursuing a stake in SA Express.
“We were approached for this opportunity but after a thorough assessment, we decided not to pursue it. Siga Express, however, is still pursuing the opportunity,” Buthelezi said.
Siga is controlled by Patuxolo Nodada and plays an important role in the transport market with an 80% market share in the locally produced public transport/city buses.
Siga’s attorney Gcobisa Nkomo confirmed that the company was still interested in getting a stake in the embattled airline.
“Mr Nodada just contacted me advising that the deal is still going on and Siga Express has until 30 June 2021 to act. However, as of 9 March 2021, Harith General Partner is no longer participating in this transaction. Thus, Siga Express shall endeavour to act in accordance with the deadline of 30 June 2021,” she said.
The material assets of SA Express were valued at R113-million, according to a private evaluation. The highest offer for the assets had been R50-million from Fly SAX, which was accepted.
Aviwe Ndyamara, the airline’s provisional liquidator in February presented the report on the status of the provisional liquidation of SA Express.
He said that the provisional liquidators had successfully reduced the bond of security from R1.8-billion to R113-million.
He did not respond to questions on this story.
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