Ramokgopa says the failed majority sale of SAA was still 'the best option'
Considering how the SAA has proven itself to be profitable without a strategic equity partner, Maropene Ramokgopa was asked whether the majority sale was even necessary.
South African Airways planes. Picture: Facebook
CAPE TOWN - Planning, Monitoring and Evaluation Minister Maropene Ramokgopa says the failed majority sale of South African Airways (SAA) is still "the best option".
Ramakhosa said the private equity sale to the Takatso Consortium would have opened up funding avenues for the struggling airline.
She said this in a written parliamentary reply to a question on whether the deal was the best option to revive SAA.
Considering how the SAA has proven itself to be profitable without a strategic equity partner, Ramokgopa was asked whether the majority sale was even necessary.
She replied, saying the Takatso Consortium transaction deal was “the best option in reviving SAA because it would have given the airline the "required capital injection for its expansion”.
“Furthermore, the deal would guarantee SAA’s future sustainability as the government would not be expected to inject capital into SAA for operations,” she added.
Ramokgopa says now that the Takatso Consortium transaction has been terminated by mutual consent, SAA will need to raise debt funding - which requires interest to be paid whether the airline makes a profit or loss in any particular year.
She said before the Takatso Consortium came along, financial institutions were unwilling to extend further credit to SAA before it was consequently placed under business rescue.
Meanwhile, on Thursday, SAA management told a planning monitoring and evaluation committee workshop that it would now be submitting a “final adjusted” corporate plan following the Takatso Consortium transaction termination.