An entity led by SA Express workers is only interested in buying the airline’s entire shareholding from the government and aviation assets that are lucrative.

Fly SAX, which was founded by a group of SA Express workers and recently emerged as successful in the airline’s sale process, wants to only purchase SA Express’s flight routes, landing rights, and aviation-related licences. Most of SA Express’s value lies in its aviation licences because, without them, the troubled airline will not be able to restart its operations.

Fly SAX’s buyout offer excludes SA Express assets including its aircraft fleet, engine parts, and spares for the aircraft. These assets will be sold through a public auction on 18 November by GoIndustry DoveBid Africa, an operator of online auctions that was hired by the team of SA Express provisional liquidators.

SA Express flights were grounded in February after the airline was successfully placed under involuntary business rescue by the High Court in Johannesburg, following a successful application by a creditor.  Without financial support from the government, the business rescue process failed, prompting the court to place SA Express under provisional liquidation in April.

The provisional liquidators of SA Express – led by Aviwe Ndyamara – will return to the high court on 28 October to convince it that the airline shouldn’t be placed under final liquidation. A final liquidation would imply the death of SA Express after 26 years in the skies.

GoIndustry DoveBid Africa posted a notice about the upcoming public auction on its website. The company said SA Express assets that are not wanted by Fly SAX include eight Bombardier CRJ200 jet aircrafts, “which are not in an airworthy condition, with some even being scrapped by the Civil Aviation Authority”. Other assets that will go under the hammer include workshop equipment and non-aviation assets such as IT infrastructure and office furniture.

SA Express purchase price

Fly SAX was founded in August by a group of SA Express workers. In its bid, Fly SAX teamed up with Uprise.Africa, which calls itself a “crowdfunding, private-equity platform”. Fly SAX and Uprise.Africa plan to raise an undisclosed amount of money for SA Express through Uprise.Africa’s crowdfunding platform – funds that will be used to pay SA Express creditors, buy aviation assets, and restart the airline.

The provisional liquidators of SA Express are expected to conclude a sale agreement with Fly SAX over the next coming weeks, binding the latter to the airline purchase. The agreement will have to be approved by the Department of Public Enterprises, which is the sole shareholder of SA Express.

The agreement is expected to detail that Fly SAX will take over the government’s entire SA Express shareholding, for which it will pay about R50-million. By the time the sale agreement is concluded, Fly SAX is required to have secured funding for the SA Express purchase.

The SA Express provisional liquidators said in September that the R50-million should be paid to them in the form of a bank guarantee. In other words, Fly SAX will have to enter into an agreement with a lender to foot the bill for the SA Express purchase if it cannot independently raise the money.

It is not clear whether Fly SAX has so far raised the required funding. Questions sent by Business Maverick to Fly SAX via email on Thursday 22 October were not answered at the time of publishing the article. DM/BM