State-owned airline SAA gets interim board ahead of possible sale to Takatso
The new SAA board will be led by Derek Hanekom, a former tourism minister who is likely to have a firm grasp of the economic importance of facilitating the influx of tourists into South Africa.
State-owned airline SAA has a new board — the eighth since 2009.
There is no guarantee the new SAA board will be around for any great length of time, considering that it has been appointed on an interim basis by Public Enterprises Minister Pravin Gordhan, who oversees the governance affairs of the airline.
So continuity continues to hang in the balance at SAA at a time when the airline recently restarted operations to embark on domestic, regional (African continent) and international routes.
The new SAA board will be chaired by former tourism minister Derek Hanekom. The airline will play an important role in the domestic tourism industry as it ferries international visitors into South Africa.
“[Hanekom’s] experience in fostering collaboration between government and private sectors will be invaluable in guiding SAA through its restructuring and revitalisation,” said the Department of Public Enterprises (DPE).
After his appointment was announced, Hanekom told Business Maverick that he would be meeting with the airline’s executive management, led by CEO and previous board chair, John Lamola, on Tuesday.
Hanekom said he preferred to become familiar with SAA’s financial and operational affairs before speaking to the media about the strategic direction of the airline.
On the new interim board, Hanekom will be supported by finance professional Fathima Gany; former Airports Company of SA chief operating officer Fundi Sithebe; finance and business strategist Mahlubi Mazwi; corporate and compliance lawyer Johannes Collen Weapond; financial and corporate restructure expert Clarissa Appana, and economist and strategist Dumisani Sangweni.
It is unclear why this new board has not been appointed permanently by Gordhan. Over the past four years, the board has similarly been appointed on an interim basis. The state-owned airline exited a business rescue process on 30 April 2021.
Over the past two years, Takatso Consortium has been attempting to purchase a majority stake in SAA. Takatso, comprising infrastructure investment firm Harith General Partners and Global Airways (an aircraft leasing company), planned to acquire 51% of SAA from the government. Negotiations around this deal have been continuing for nearly two years.
It is assumed the Takatso Consortium would want to appoint its own board of directors if and when the purchase has been finalised.
Takatso has made it clear that it will not take up the agreed 51% stake in SAA until all historic debt of the airline has been settled.
Despite SAA getting R1-billion in the 2023 February Budget from Finance Minister Enoch Godongwana, the DPE estimates that another R2.5-billion is needed to settle the airline’s total debt.
“To support SAA in achieving its goals, we have put in place strategies and plans that align with the airline’s vision and objectives,” Gordhan said in Monday’s statement. These “strategies and plans” are known only to Gordhan and his department.
Business Maverick has been informed by several sources that there is a dispute between the DPE and Takatso Consortium about the value of SAA.
The Takatso Consortium partners are reportedly wary of injecting R3-billion into the airline when it is considered to be running at a loss and not aggressively restarting its regional and international operations.
SAA’s financial position is not known — it has not submitted its financial statements for years in Parliament or published them for the public’s consumption.
According to suspended DPE director-general, Kgathatso Tlhakudi, assets belonging to SAA were undervalued by R7-billion by the Takatso Consortium, and the airline’s incoming board is slated to approve the irregular transaction. This is according to an article published by City Press.
Read more: Suspended DG slams SAA deal | City Press
The undervaluation, Tlhakudi claims, was part of a process conducted by the Takatso Consortium. He said confidential sources had informed him that Gordhan was intending to change the SAA board and replace it with a compliant one that would rubber-stamp the transaction.
The report by City Press implies Gordhan is prepared to allow and approve a transaction in which SAA assets would be purchased cheaply by Harith General Partners and Global Airways. DM/BM