Takatso consortium hails the 'historic' SAA merger approval.
By Lehlohonolo Lehana.
Takatso consortium has welcomed the Competition Tribunal's approval of its proposed merger with South African Airways (SAA) as a historic moment.
The tribunal on Tuesday announced that it had approved the transaction subject to conditions involving a moratorium on retrenchments and divestiture of the shareholding by the minority shareholders in the Takatso consortium.
The tribunal did not provide any further details about the divestiture or retrenchment conditions it has imposed on the transaction and indicated that the reasons for its decision will be issued in due course.
Takatso is on its way to acquiring, from the government, a 51% stake in the struggling national carrier.
Competition Tribunal approval of the transaction reaffirms our belief that the airline industry in this country can do with more seat capacity and related price and service competition, especially in light of the current mismatch between demand and supply, that has been created by the significantly reduced scale of SAA operations in recent years, as well as the demise and discontinuation of operations of several other airlines," said the group's Thulasizwe Simelane.
"The Tribunal's approval is also an affirmation of our conviction that such competition can only come from a strong, competitive, financially-sustainable, and agile SAA, backed by a committed equity partner supporting it to grow and seize opportunities presented by the market at the moment."
If the transaction is finalised, the remaining 49% shareholding in SAA will be retained by the Department of Public Enterprises (DPE).
DPE Minister Pravin Gordhan on Tuesday welcomed the tribunal's approval of the proposed transaction, adding that the department hailed the decision as a significant step in the government’s efforts to consolidate the re-emergence of the national carrier as a key strategic asset.
Gordhan said the tribunal's decision sets Takatso and the DPE firmly on course to finalise other critical regulatory requirements to conclude the transaction aimed at turning SAA into a competitive, profitable, and viable carrier, both locally and internationally.
"With this decision, the Competition Tribunal has affirmed our belief as government that a revitalised and well-capitalised SAA presents the country with significant opportunities to boost economic connectivity and strategic reach that should benefit our economy and our people for years to come.
"I am confident that the repositioning of SAA sets a very good example of what can be achieved when the right financial and operational framework is given to state-owned companies so they can fulfil their mandate to advance our economic transformation and development as a country."
Gordhan added that it is very gratifying to see that the government is on the verge of having SAA finally infused with the requisite strategic vision, expertise, and capital by Takatso.
"The approval by the Competition Tribunal also sends a very strong message about the extent of the hard work that has gone into this transaction, considering that SAA was on the brink of liquidation.
The steps we have taken will ensure that SAA is returned to profitability and sustainability," he said.
Takatso, a company newly incorporated for the purposes of the proposed transaction, is a consortium in which asset management firm Harith General Partners holds the majority shareholding.