CONSORTIUM PROPOSES R21BN LOAN TO SAA

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CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by GL » Sun Dec 23, 2018 11:29 am

CityPress 23 Dec 2018 SIPHO MASONDO

Fly Mod­ern Ark and Cer­berus Cap­i­tal Man­age­ment – a con­sor­tium of lo­cal and in­ter­na­tional in­vestors – have made an un­so­licited loan of­fer to SAA to the tune of

R21 bil­lion in re­turn for a 51% stake in the bank­rupt air­line. In Sep­tem­ber, City Press re­ported that SAA would need R21 bil­lion be­tween then and 2021, when the air­line is ex­pected to re­turn to profitabil­ity. In his midterm bud­get speech in Oc­to­ber, Fi­nance Min­is­ter Tito Mboweni had an­nounced a R5 bil­lion bailout for SAA. In his midterm bud­get speech in Oc­to­ber, Fi­nance Min­is­ter Tito Mboweni had an­nounced a R5 bil­lion bailout for SAA. Last month, SAA’s act­ing chief fi­nan­cial of­fi­cer (CFO), Deon Fred­er­icks, told Par­lia­ment that the air­line would need a fur­ther R3. 5 bil­lion be­tween then and endMarch 2019. Yes­ter­day, SAA spokesper­son Tlali Tlali said lenders had agreed to ad­vance a fa­cil­ity that would see the na­tional car­rier through to March next year. Yes­ter­day, SAA spokesper­son Tlali Tlali said lenders had agreed to ad­vance a fa­cil­ity that would see the na­tional car­rier through to March next year. In an email sent last week by Fly Mod­ern Ark’s co­founder, The­u­nis Crous, to var­i­ous stake­hold­ers – in­clud­ing SAA chief ex­ec­u­tive Vuyani Jarana and Pub­lic En­ter­prises Min­is­ter Pravin Gordhan – Crous con­firms that talks re­gard­ing the fund­ing were held be­tween his team and air­line of­fi­cials. “As in­di­cated, our com­pany – in part­ner­ship with lo­cal and in­ter­na­tional fi­nanciers – has en­gaged with Vuyani Jarana, [for­mer in­terim CFO] Robert Head and [SAA trea­sury boss] Lucky Nco­bela with re­gard to fund­ing SAA in the short, medium and long term, which in­cluded the po­ten­tial eq­uity trans­ac­tion re­lated thereto. ”

In an email sent last week by Fly Mod­ern Ark’s co­founder, The­u­nis Crous, to var­i­ous stake­hold­ers – in­clud­ing SAA chief ex­ec­u­tive Vuyani Jarana and Pub­lic En­ter­prises Min­is­ter Pravin Gordhan – Crous con­firms that talks re­gard­ing the fund­ing were held be­tween his team and air­line of­fi­cials. “As in­di­cated, our com­pany – in part­ner­ship with lo­cal and in­ter­na­tional fi­nanciers – has en­gaged with Vuyani Jarana, [for­mer in­terim CFO] Robert Head and [SAA trea­sury boss] Lucky Nco­bela with re­gard to fund­ing SAA in the short, medium and long term, which in­cluded the po­ten­tial eq­uity trans­ac­tion re­lated thereto. ”

The depart­ment of pub­lic en­ter­prises has said that SAA needs an eq­uity part­ner, but has not re­vealed the size of the stake that it is will­ing to sell. Crous’ email reads fur­ther: “The above dis­cus­sions cul­mi­nated in a tele­con­fer­ence with our­selves, our in­ter­na­tional part­ners. . . These dis­cus­sions were con­struc­tive and fruit­ful, and we were to en­gage af­ter the min­is­ter of fi­nance’s midterm bud­get vote in Oc­to­ber 2018. ”

Crous’ email reads fur­ther: “The above dis­cus­sions cul­mi­nated in a tele­con­fer­ence with our­selves, our in­ter­na­tional part­ners. . . These dis­cus­sions were con­struc­tive and fruit­ful, and we were to en­gage af­ter the min­is­ter of fi­nance’s midterm bud­get vote in Oc­to­ber 2018. ”

How­ever, the email shows that fol­low­ing Head’s de­par­ture from SAA, the meet­ing did not hap­pen. Added Crous: “We are firmly of the view that we, as a con­sor­tium, would add in­trin­sic value to the turn­around strat­egy of SAA over and above the fund­ing re­quire­ments. ”

Gordhan ac­knowl­edged Crous’ cor­re­spon­dence via an email writ­ten by a per­son named Se­latswa Masenya: “On be­half of Mr Pravin Gordhan. . . I hereby ac­knowl­edge re­ceipt of your cor­re­spon­dence. . . The con­tents thereof have been noted and will be brought to the min­is­ter’s at­ten­tion at the ear­li­est op­por­tu­nity. ”

Gordhan ac­knowl­edged Crous’ cor­re­spon­dence via an email writ­ten by a per­son named Se­latswa Masenya: “On be­half of Mr Pravin Gordhan. . . I hereby ac­knowl­edge re­ceipt of your cor­re­spon­dence. . . The con­tents thereof have been noted and will be brought to the min­is­ter’s at­ten­tion at the ear­li­est op­por­tu­nity. ”

This week, Crous told City Press that SAA needed an eq­uity part­ner. “We are of­fer­ing them R21 bil­lion as a loan and we are pre­pared to take 51% and then plough in more money to re­cap­i­talise the busi­ness. SAA ini­tially ex­pressed an in­ter­est in the idea but later went quiet. Cer­berus knows how to turn around com­pa­nies. ”

Tlali con­firmed that a meet­ing with Fly Mod­ern Ark had taken place in May at the air­line’s head of­fice in Kemp­ton Park. “Fly Mod­ern Ark wanted an op­por­tu­nity to present their ca­pa­bil­ity, which they sug­gested could be ben­e­fi­cial to SAA’s turn­around strat­egy, in­clud­ing ad­dress­ing our liq­uid­ity chal­lenges. The dis­cus­sion with Fly Mod­ern Ark did not in­clude any dis­cus­sion re­gard­ing a strate­gic eq­uity part­ner. ”

Tlali con­firmed that a meet­ing with Fly Mod­ern Ark had taken place in May at the air­line’s head of­fice in Kemp­ton Park. “Fly Mod­ern Ark wanted an op­por­tu­nity to present their ca­pa­bil­ity, which they sug­gested could be ben­e­fi­cial to SAA’s turn­around strat­egy, in­clud­ing ad­dress­ing our liq­uid­ity chal­lenges. The dis­cus­sion with Fly Mod­ern Ark did not in­clude any dis­cus­sion re­gard­ing a strate­gic eq­uity part­ner. ”

He said the trou­bled air­line was not in­volved in any bid to to find an eq­uity party, adding that if that process did hap­pen, it would be led by the gov­ern­ment. Tlali stressed that the dis­cus­sions with Fly Mod­ern Ark cen­tred on fund­ing, not the ac­qui­si­tion of a stake by the com­pany. He de­nied that a tele­con­fer­ence took place. Tlali stressed that the dis­cus­sions with Fly Mod­ern Ark cen­tred on fund­ing, not the ac­qui­si­tion of a stake by the com­pany. He de­nied that a tele­con­fer­ence took place. Adrian Lackay, spokesper­son for the pub­lic en­ter­prises min­istry, said gov­ern­ment was cur­rently not in­volved in talks to ac­quire po­ten­tial part­ners. “Ac­quir­ing an eq­uity part­ner for SAA would re­quire a sig­nif­i­cant cap­i­tal in­jec­tion from gov­ern­ment up­front. For a com­mit­ment of this na­ture to take ef­fect, it is es­sen­tial that the com­pany is first sta­bilised op­er­a­tionally in or­der for gov­ern­ment as the share­holder to re­alise op­ti­mal value from a strate­gic eq­uity part­ner­ship. ”

The min­istry, Lackay said, had re­ceived var­i­ous un­so­licited bids from com­pa­nies want­ing to ac­quire a stake in the air­line. “In terms of the Pub­lic Fi­nance Man­age­ment Act and the Con­sti­tu­tion, such bids can­not ar­bi­trar­ily be con­sid­ered, en­tered into or ac­cepted. It would have to fol­low due process. ”

Lackay said that SAA, with gov­ern­ment’s sup­port, was work­ing to raise suf­fi­cient fund­ing to meet its im­me­di­ate and mediumterm liq­uid­ity re­quire­ments.
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by Selfloader » Sun Dec 23, 2018 7:21 pm

Unless the government retains control of SAA, the offer will be ignored and taxpayers will continue to foot the bill.
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by Selfloader » Sun Dec 23, 2018 8:38 pm

There again, maybe a quick look at this website might raise a few questions.
Website: http://flymodernark.com/
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by PST » Sun Dec 23, 2018 9:22 pm

Selfloader wrote:
Sun Dec 23, 2018 8:38 pm
There again, maybe a quick look at this website might raise a few questions.
Website: http://flymodernark.com/
Hmm... I don’t know everything or everyone, but I’ve never heard of them?... And, yes, a few fishy things on their website:
1. No physical address or telephone number (only a cellphone number.....one. For a company with enough capital to potentially acquire a 51% stake in the national carrier..)
2. No mention of the affiliate company (Cerberus Capital) with proven track record in corporate turnaround success as per the newspaper article
3. No Air Service Licence numbers as is required when you market a commercial air service, whether scheduled or non scheduled, local or international
4. 100% Black Female owned, but a certain Theunis Crous is cited as the founding member.... ?

Unless I missed it. Or the point.
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by evanb » Sun Dec 23, 2018 11:54 pm

PST wrote:
Sun Dec 23, 2018 9:22 pm
No mention of the affiliate company (Cerberus Capital) with proven track record in corporate turnaround success as per the newspaper article
Cereberus are well-known in the US and have been a backer of David Neeleman (guy behind Azul, Jetblue and Westjet) in the past.
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by Only » Mon Dec 24, 2018 5:11 am

PST wrote:
Sun Dec 23, 2018 9:22 pm
Selfloader wrote:
Sun Dec 23, 2018 8:38 pm
There again, maybe a quick look at this website might raise a few questions.
Website: http://flymodernark.com/
Hmm... I don’t know everything or everyone, but I’ve never heard of them?... And, yes, a few fishy things on their website:
1. No physical address or telephone number (only a cellphone number.....one. For a company with enough capital to potentially acquire a 51% stake in the national carrier..)
2. No mention of the affiliate company (Cerberus Capital) with proven track record in corporate turnaround success as per the newspaper article
3. No Air Service Licence numbers as is required when you market a commercial air service, whether scheduled or non scheduled, local or international
4. 100% Black Female owned, but a certain Theunis Crous is cited as the founding member.... ?

Unless I missed it. Or the point.
We have had a discussion of then before.

https://www.avcom.co.za/phpBB3/viewtopi ... k#p1790163
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by PST » Mon Dec 24, 2018 5:54 am

Thank you, evanb and only. Will check it out.
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by 117 » Mon Dec 24, 2018 7:41 am

From their own website:

The shareholders consist of South African Business women in association with Women Military Veteran Association of SA (WOMVASA).

Anyone want to start connecting dots?
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by Airwayfreak » Mon Dec 24, 2018 7:43 am

Same group wanting to buy out some of Air Zimbabwe and even SAX if memory serves. Doubt if this will transpire
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by Ray W » Mon Dec 24, 2018 8:51 am

This sounds to good to be true - lets wait and see what happens
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by GRAHAMW » Mon Dec 24, 2018 9:02 am

How much is SAA actually worth according to its balance sheet?
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by happyskipper » Mon Dec 24, 2018 9:07 am

“We are of­fer­ing them R21 bil­lion as a loan and we are pre­pared to take 51% and then plough in more money to re­cap­i­talise the busi­ness. SAA ini­tially ex­pressed an in­ter­est in the idea but later went quiet. Cer­berus knows how to turn around com­pa­nies. ”
Wait, what?? They will grant SAA a R21Bn LOAN, in exchange for a 51% stake in the airline....??
"SAA for nothing, and your checks for free" c'mon sing along......

I wonder where the Chinese are hiding in this "consortium"?
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by happyskipper » Mon Dec 24, 2018 9:35 am

I "Googled" the address, and these are just a couple of the sites it produced - I wouldn't touch it with a barge-pole..... :lol: :lol: :lol:

https://vosa.co.za/virtual-office-locations/


https://www.hellopeter.com/secur-cyber- ... nt-2357193


http://www.pty-online.co.za/static_page ... 6532647066
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by Ray W » Mon Dec 24, 2018 10:01 am

Selfloader wrote:
Sun Dec 23, 2018 8:38 pm
There again, maybe a quick look at this website might raise a few questions.
Website: http://flymodernark.com/
From their website

"The BBJ is registered on the ZS register en will be operational on the 1st of October 2016."

Apart from the SAAF BBJ no other BBJ has been registered here. There was one based in Cape Town but it was registered in the Bahamas.

This bunch sound really dodgy
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Re: CONSORTIUM PROPOSES R21BN LOAN TO SAA

Unread post by Selfloader » Mon Dec 24, 2018 6:47 pm

This should put an end to any further discussion on the matter. Theunis Crous and his good friend Primrose (she's the company president)
feature prominently in this report.
https://www.news24.com/Archives/City-Pr ... d-20150429

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