The South African government has terminated a sales contract for state-owned South African Airways signed almost three years ago.
South Africa's Department of Public Enterprises planned to sell a 51% stake in the airline to an investment consortium called Takatso. The sales contract was terminated by mutual agreement, DPE said. Takatso did not respond to an email seeking comment.
DPE said the deal fell through as the parties failed to reach agreement on a revised transaction price after SAA's value rose. The original sale agreement was signed in June 2021, during a period when the bankrupt airline suspended operations due to the Covid-19 pandemic. At the time, the airline was valued at a liquidation value of 2.4 billion South African rands (about $128 million).
The airline resumed transatlantic flights last fall after a year-long hiatus in early 2021. According to Planespotters.net, SAA currently operates 11 aircraft but has not resumed flights to the United States. A recent valuation determined that the airline was worth 6.5 billion rand ($348 million).
“It was clear from the negotiations that the revised transaction structure must take into account public interest and fair market value. However, these requirements were not met in the renegotiation,” the DPE said.
The government said it would next explore alternative SAA funding. An aviation strategic advisor will also be appointed to support the SAA board.
“We are confident that SAA will continue to fly and grow in terms of the number of routes and aircraft available for lease,” DPE said.
