Government willing to cede control of SAA to lure investors

Government says it’ll protect certain strategic imperatives, while helping to improve management and governance.
Image: Supplied

South Africa’s government plans to retain a minority shareholding in South African Airways, the national airline that has been in bankruptcy protection for the last six months, while ceding management control to its investors, an official said.

“We are not obsessed with control,” Kgathatso Tlhakudi, deputy director-general at department of public enterprises, said in an interview on Radio 702 Wednesday. “If we find the right partner who is prepared to inject the technology and access to markets that we require for the airline, and they are assuming management control, we are quite comfortable to let go of that.”

With a smaller shareholding the government will protect certain strategic imperatives, while helping to improve management and governance measures required to ensure SAA’s future success, he said.

South Africa received proposals from private investors and potential airline partners interested in taking part in the restructuring of the national carrier. Creditors are due to vote on a rescue plan by administrators this week that proposes a bailout of at least R26.7 billion for the loss-making carrier.

© 2020 Bloomberg L.P.

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Govt cede control as shareholder but make all the laws around the operations !
Why then hold shares at all ?

And the next 5 years of operations if this hair-brained scheme is allowed to proceed will result in another R26 plus billion loss. International travel (about half of whom are elderly) is not going to return to the same levels of the last 5 years. According to the press half the hotels and the bulk of the lodges and BnBs in South Africa are bankrupt and / or unlikely to start business again.
Even if a vaccine is found next week, it will probably take another 18 months for production and roll out, and South Africa will probably be at the end of the queue with the rest of Africa.
The ANC is willing to squander upwards of R50 billion on an insane vanity project benefiting only the wealthy elite travelers instead of on the countless, poverty stricken black youth in this country. Improving their living conditions (water was rolled out surprisingly quickly to a few places under lockdown), housing, electricity supply and education could be vastly improved with R50 billion if properly managed. My concern is that the ANC has wasted 25 years and a generation of ‘free’ township kids born after 1994 are no better off than the generation before 1994.

Well said!

Your logic is sadly unable or unwilling to be utilised by those who have shown their complete incompetence in attempting to run this and all other SOE related businesses.

We are happy with a minor share – as long as you do the financing , the thinking and the work. If there is a dispute we just call on the unions to sabotage you a little , or we mess you around with some extra burdensome legislation..
Show me any sane entity that will walk into this Mission Impossible .

End of comments.

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