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South African Airways (SA, Johannesburg O.R. Tambo) has no cash value and will be sold off for ZAR51 rand (USD3) to the private sector Takatso Consortium, but the transaction remains unfinalised with no indication of when it is likely to be completed.

In return for a 51% stake, Takatso will inject ZAR3 billion (USD185 million) in working capital over two years (reduced from three years as initially stated) and pay the ZAR51 as its share of the nominal transaction fee required under South African law.

This is according to a clarification of the financial aspects of the privatisation deal provided by Public Enterprises Minister Pravin Gordhan, who said an independent expert valuation had placed the total consideration due to the government at “ZAR3,000,000,051 (USD185,201,801)”.

For its part, Takatso, in a statement on May 12, said: “Structures of this nature are usually characterised by a low purchase price and significant future funding commitments and are typically used for distressed assets such as SAA, which require extensive restructuring and recapitalisation to ensure a sustainable business model”....

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