SAA sale is above board, says Gordhan

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The disposal of the government’s majority share in SAA has been above board, Public Enterprises Minister Pravin Gordhan said on Friday.

Gordhan, who was tabling his department’s budget vote, assured the public that there has been “absolute transparency” with regard to the sale of a 51% stake in the airline to the Takatso Consortium. 

“All the necessary legal processes were complied with, notwithstanding the regrettable efforts by many to sabotage or undermine what is an important project in terms of recovering an SOE [state-owned entity] from the damage that was caused by state capture,” he said.

The minister’s statement comes after doubt was cast on his department’s role in the transaction when it emerged that the treasury was allegedly cut out of negotiations — which saw the controlling stake in the national carrier being sold for a discount price of R51, in return for spending commitments and responsibility for operations, according to a Bloomberg report.

The report sparked questions from parliament’s standing committee on public accounts, where Gordhan insisted that there was no tension with the treasury. Minister of Finance Enoch Godongwana agreed.

Gordhan clarified that Takatso will be required to inject R3-billion into SAA over a period of two years.

In its statement, Takatso said the proposed transaction has been structured in a way that gives SAA the greatest chance of success.

“Structures of this nature are usually characterised by a low purchase price and significant future funding commitments and are typically used for distressed assets such as SAA, which require extensive restructuring and recapitalisation to ensure a sustainable business model.”