Minister of Public Enterprises Pravin Gordhan announced on Wednesday that the deal to sell a 51% stake in SAA to the Takatso consortium has been called off.
The decision marks the culmination of a tumultuous journey since the agreement was initially reached in June 2021.
The sale of the airline faced numerous hurdles, chief among them being the necessity to re-evaluate SAA’s assets due to the substantial time that elapsed between the initial agreement and the finalisation of the share sale.
Gordhan gave an update during a media briefing, revealing that the airline will now revert to full state control, putting an end to the contentious negotiations surrounding the deal.
Explaining the rationale behind the termination, Gordhan cited the impact of the post-Covid-19 market, which led to a revaluation of SAA’s worth.
Valuation falls short of original offer
The revised valuation fell short of Takatso’s original offer of R3-billion, with the airline’s business valued at about R1-billion and its property at R5-billion.
“While there were initial hopes for a successful partnership, various factors have led us to the decision to cease negotiations with Takatso,” stated Gordhan.
He emphasised that the termination was not a result of external pressure but rather a mutual agreement reached late last week due to the lack of a clear path forward.
Revised transaction terms
Takatso said in a statement: “Takatso has therefore concluded that the revised transaction terms are no longer in the best interests of its stakeholders, especially in light of further, as-yet-unfulfilled transaction closing conditions.
“These include the cumbersome divestiture condition imposed by the Competition Tribunal, the need to receive further necessary legal and regulatory approvals, as well as the repeal of the SAA Act, which was withdrawn from parliament last month.
“Takatso can confirm that the department has since reverted to it, consenting to that termination.
“The parties have thus mutually agreed to terminate the share purchase agreement, previously announced on February 22 2022, in which Takatso was to acquire a 51% interest in SAA.
“Consequently, all work and negotiations on the proposed transaction have ceased. Neither party will be required to pay the other a termination fee or other consideration as a result of the mutual decision to terminate the agreement.”
Negotiations will not continue
Gordhan reiterated the government’s commitment to finding a suitable partner for SAA but acknowledged that the search would not proceed through the previously pursued process with Takatso.
However, with the airline now set to remain under state ownership, attention turns to the government’s next step in charting the future course for SAA and addressing the challenges that lie ahead.
Said Gordhan: “As a result of various factors, we have come to the point where those negotiations will no longer continue.
“Our search for the right partner for SAA will not happen through this process.”
