Govt will open ownership of new SAA to all South Africans – Mboweni

Tito Mboweni. Image credit: Twitter/National Treasury

Finance Minister Tito Mboweni says ownership of a restructured South African Airways (SAA) will be open to all South Africans.

Mboweni made the revelation during a Bloomberg Capital Markets Focus: South Africa virtual engagement on Tuesday.

Public-private ownership

He said, “We should move towards a new airline that the Cabinet has decided upon and that airline will be owned by the government and more broadly by private sector investors.

“We should move with speed. Let’s create a new airline – privately owned, publicly owned together; issue the capital structure, the number of shares [and] let people subscribe to the shares through subscription agreements and let’s get on with it.”

Asked if this means that the government will open up an equity offering to all South Africans, Mboweni replied, “Yes, it is indeed [one of the ideas]. Most certainly.”

Business rescue

SAA was placed under business rescue in December 2019. In October, Mboweni announced a R10.5 billion budgetary allocation to fund the airline’s business rescue plan.

The Cabinet endorsed the plan earlier this year, but it remains unclear at this stage how much equity the government would own in a restructured SAA.

Mboweni said Public Enterprises Minister Pravin Gordhan’s engagements with potential SAA private investors are “going in the right direction.”

Earlier this month, Gordhan told Parliament that several private equity partners have expressed interest in investing in a restructured SAA.

Transaction advisor

The government has therefore appointed a transaction advisor to manage this process, which could be complete by the end of December or in early 2021, he added.

“It must be noted [that] SAA has a highly credible reputation both across the African continent and globally. It is an attractive proposition,” Gordhan said.

He said the new investors will not take on any SAA debt and the government will have to pay all liabilities and restructuring costs.

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