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South Africa has cancelled plans to sell a stake in its national airline, South African Airways (SAA), after failing to reach an agreement on valuation and other terms with a consortium of private investors.
The government had intended to sell 51% of the struggling SAA to the Takatso Consortium since 2021, aiming to reduce the need for repeated bailouts of the airline.
However, after three years of negotiations, Public Enterprises Minister Pravin Gordhan announced on Wednesday that the deal had collapsed, stating that “there is no clear path forward.”
Mr. Gordhan pointed to the impact of the post-Covid-19 market as a significant factor in the decision, which led to a reassessment of SAA’s value.
He said, “We are convinced that SAA can sustain itself in the next year to 18 months and that there are various other ways in which immediate financing can be obtained.”
The Takatso Consortium released a statement expressing that the changes in the deal to acquire SAA would have taken too long to achieve.
As a result of the terminated deal, SAA will remain fully state-owned for now, although the government noted that the airline remains open to exploring other partnership opportunities.
The collapse of the deal deals a blow to President Cyril Ramaphosa’s efforts to privatize underperforming state entities and mitigate state debt.
Ozioma Samuel-Ugwuezi
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