SA Express’s anchor investor has until close of business on Thursday (March 25) to produce the bank guarantee required for the balance of the R50 million purchase price of the airline.
Roughly R24 million was raised following an auction of the airline’s assets in November last year, leaving an outstanding balance of R26 million.
In January the airline’s provisional liquidation was extended to April 29 to allow for the conclusion of the shareholding agreement between the provisional liquidator and the government.
The payment of the outstanding balance and the conclusion of the shareholding agreement has to be finalised before the end of April in order for the airline to avoid final liquidation.
SA Express, which has been under provisional liquidation since April last year, is set to be owned by worker-owned entity, Fly SAX after the entity was chosen as the preferred bidder in October.
The entity met with the airline’s liquidator, Aviwe Ndyamara, and the anchor investor on Wednesday to discuss the payment of the outstanding balance. The anchor investor is also expected to provide seed funding that will be used to recapitalise the airline to get it off the ground.
However these funds had not materialised at the time of the meeting, according to Ndyamara. Should the payment not be made by the end of Thursday, according to the agreements signed with the anchor investor, Fly SAX will be required to “look for other [financing] options between now and the [end of] term date”.
The airline was set to be recapitalised through crowdfunding platform Uprise.Africa. This has however been put on hold to allow the anchor investor to provide the much needed financing immediately.
Initially, Fly SAX had estimated that it would require R250 million as start-up capital for the airline, with R200 million to be sourced from the anchor investor and through equity crowdfunding.
The public offering will reopen once the airline resumes operations.
Chief executive of Uprise.Africa Tabassum Qadir said the initial anchor investors secured last year – Imperial Capital LLC and Landile Shembe Foundation – both still intend to participate in the equity crowdfunding round.
“However once shares have been transferred to Fly SAX the discretion will be solely with their anchor [investor] (undisclosed by Fly SAX) if they want to crowdfund or not as they may not be open to idea of an alternative and institutional-free funding model but rather a traditional mode of funding,” she said in a statement.
Both Fly SAX spokesperson Thabsile Sikhakhane and Ndyamara declined to provide the name of the mystery anchor investor as doing so would breach signed non-disclosure agreements.
Moneyweb however understands that Siga Express, Tshepo Mahloele and Lebashe Investment Group have all thrown their hats in the ring to potentially save SA Express from final liquidation.
Siga Express is a subsidiary of Johannesburg-based investment holding company Siga Capital. It focuses on “being an integrated public transport operator through partnerships, new contracting, and acquisitions in the South African market”, according to its website. Mahloele is the chairman of the Lebashe Group.
In correspondence sent to Ndyamara in January, seen by Moneyweb, Siga chair Patuxolo Nodada and Tshepo Mahloele, ( representing Harith General Partners according to the letter) , jointly offered to provide the R26 million required to buy SA Express.
Harith spokesperson Khaya Buthelezi told Moneyweb that the company had not provided the airline’s liquidator with the outstanding funds required to purchase SA Express. Despite the correspondence sent to the airline’s liquidator naming Mahloele as a representative of Harith, Buthelezi told Moneyweb that the company is not involved in the transaction.
Nodada had not responded to queries by the time of publication.
Lebashe chief investment officer Warren Wheatley said the investment company was approached earlier this year by Fly SAX to “support them” in their bid to buy SA Express. The company has however not made any financial commitments.
“We’ve written back and expressed an interest to work with them, but it [the transaction] is subject, of course, to detailed due diligence, [a] detailed understanding of the strategy, and detailed negotiations,” he said.