South Africa Sells Majority Stake of National Airline to Consortium
The South African government has sold the country’s majority stake in the national airline, South African Airways to a consortium comprising Global Airways, the newly launched airline Lift and private -equity firm Harith General Partners.
The deal rids South Africa of an entity that has become a burden following the economic challenges caused by the COVID-19 pandemic. The private equity venture will hold will a 51% stake of South African Airways, while the government retains a minority stake.
According to Gidon Novick, the co-founder of Lift and CEO of Harith, the consortium named Takatso will be investing as much as $258 million (3.5 billion rand) in the next three years.
“Government will have no further financial obligations to the company, outside of the existing liabilities that they will settle,” Novick said.
The privatization of SAA comes just six weeks after the airline emerged from prolonged bankruptcy procedures with a workforce downsized by over 80% and liabilities lowered to roughly 2.6 billion rands. The next hurdle will be to resume international flights, although COVID-19 travel restrictions still has South Africa isolated from much of the world.
This sale will mark South Africa’s first successful privatization of a major entity two decades after it sold Telkom SA SOC Ltd.
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