New valuation sees SAA-Takatso deal grounded
Updated | By Cliff Shiko
Public Enterprises Minister Pravin Gordhan on Wednesday announced that the deal to sell a 51% stake in South African Airways to the Takatso Consortium has been scrapped.

The decision came after the two parties failed to reach an agreement on the revised transaction structure.
Gordhan said the decision took the public interest into consideration to ensure that there is fair value to the taxpayer.
In 2021, Takatso Consortium was announced as the preferred equity partner to buy a 51% stake in SAA, while the government was supposed to keep a 49% stake.
The troubled airline was placed under business rescue in 2019, which was finalised in April 2021.
Gordhan said the first valuation was undertaken during the COVID-19 period and the valuation took place when the airline was not flying.
The business and the properties were valued at a liquidation asset valuation methodology and this amount to R2,4 billion, and the business was valued at between 0 and negative.
Gordhan announced the decision in Cape Town on Wednesday.
"We regret to announce that both DPE and Takatso agreed that negotiations on the transaction have been terminated as there was no agreement on the revised transaction structure," the minister said.
"This arises largely from a new business and asset valuation undertaken by professional firms, having identified Takatso as the preferred strategic equity partner to negotiate with, three key areas needed to be noted that SAA is a public asset that has grown in value between 2019-2024.
"Recognising that it is a public asset and that any sale of shares has to be at a fair market value, thirdly, the process must result in the sustainability of SAA and its growth, in terms of its aircrafts and routes that it needs to fly."
Gordhan said over the last couple of years the valuation of the airline and its assets have improved.
"However, in the last year three years it became clear that the market conditions have changed, the economy had improved, the demand for flying had increased formidably and this required that a new valuation be done.
"The business valuation came out at R1 billion and the property valuation at R5.5 billion, this meant that there was a net increase in the property by R3,1 billion in the value of SAA. The equity value had increased from 0 to R1 billion."
Gordhan said the new corporate plan will embrace more routes and more aircraft in its business strategy.
"We are confident that SAA will continue to fly and grow in terms of the number of routes and aircraft that it is able to lease, a new form of raising finances on the basis of the assets of SAA will be explored with financial institutions."
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