We never thought it would happen. South African Airways (SAA) is pretty much on the road to being privatised after the government sold 51% – a controlling stake – of our national airline to a private consortium with serious aviation industry chops.
The “p” word – privatisation – has long been considered blasphemy by our left-leaning government and its trade union partners; they’re stuck in a somewhat Soviet time warp when it comes to state-owned enterprises (SOEs).
This is the end of a long, torturous business rescue process. Most people, including finance minister Tito Mboweni, hoped the process would result in the airline being liquidated. But his Cabinet colleague, the principled though woefully business unsavvy Pravin Gordhan, fought for the airline. So, here we are.
It’s good news in principle. Large-scale looting and poor governance have wrecked our SOEs and played havoc with public finances.
Friday’s announcement by Gordhan was met with jubilation by many. After all, no one wanted all those jobs to be lost. The 51% owners are a majority black-owned consortium called Takatso, comprised of:
1. Johannesburg-based Global Aviation, which owns recently launched domestic airline Lift, and
2. Private-equity firm Harith General Partners.
Global Aviation’s Gidon Novick will serve as Takatso CEO, and has an impressive résumé. He previously co-founded Kulula and LIFT airlines, and served as chief executive officer at Discovery Vitality and co-CEO at Comair.
But no sooner had the news broken than questions emerged about Harith, which was controversially born out of the Public Investment Corporation (PIC), manager of government pension funds. The firm’s co-founder, Tshepo Mahloele, is among the key men in the SAA deal – and he’s a former PIC fund manager. His career in both the private and public sector has frequently raised questions, though he’s denied any wrongdoing. Meanwhile Harith is chaired by former deputy finance minister Jabulani Moleketi, so some are worried about government links.
Look, it’s not quite enough to cause serious concern. We just need to keep an eye on things, especially because of questions about where Harith will get the money to recapitalise SAA, which is R16.4 billion in debt – the government is all tapped out. For now, this deal is a huge relief.
This article appeared as part of The Wrap, 17 June 2021. Sign up to receive our weekly updates