SAA after Business rescue

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Re: SAA after Business rescue

Unread post by Ugly Duckling »

Zapiro =D>
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Re: SAA after Business rescue

Unread post by Airplaneguy9 »

Is there a real chance that this is the beginning of the end for SAA, or is it just fearmongering?
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Re: SAA after Business rescue

Unread post by Ugly Duckling »

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Re: SAA after Business rescue

Unread post by snoopy »

SAA/Takatso deal is still subject to regulatory and criminal scrutiny, say industry insiders
by Banele Ginindza IOL
The termination of Takatso Consortium’s 51% takeover of the South African Airways (SAA) would not exonerate the transaction documents from regulatory, governance, civil and criminal scrutiny, officials and aviation industry insiders said on Wednesday evening.

The controversial deal has been under the spotlight due to allegations of corruption.
More here
https://www.iol.co.za/business-report/e ... 2066267f7f

Wheels finally come off SAA sale deal
by Mayibongwe Maqhina
Multimedia Journalist, IOL
After months of ducking and diving with information on the sale of SAA to equity partner Takatso Consortium, retiring Public Enterprises Minister Pravin Gordhan announced the deal was called off on Wednesday, a move opposition parties hailed.
More here
https://www.iol.co.za/capetimes/news/wh ... 783a5ac250
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Re: SAA after Business rescue

Unread post by snoopy »

This is how the SAA deal with Takatso collapsed
Written by Siyabonga Mkhwanazi IOL
14 March 2024
https://www.iol.co.za/news/politics/thi ... da38ffb285
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Re: SAA after Business rescue

Unread post by Deanw »

14 March 2024: IOL
This is how the SAA deal with Takatso collapsed

The collapse of the deal between South African Airways (SAA) with the Takatso Consortium has led to more questions about the doomed sale, with political parties calling on Public Enterprises Minister Pravin Gordhan to come clean.

Parliament’s portfolio committee that oversees State-Owned Entities said it hoped the SAA chapter would provide lessons for the country.

Minister in the Presidency Khumbudzo Ntshavheni said on Thursday it was disingenuous for Takatso to call the Competition Tribunal cumbersome.

“It is disingenuous for Takatso to call the Competition Tribunal process red-tape. It is not red-tape, it is part of due diligence that is required to make sure that there is no monopoly, but there is also no unfair, uncompetitive behaviour by business, The competition tribunal process cannot be deemed as red-tape, not at all”

“In addition, if you recall when the Takatso Consortium transaction was being considered by the Competition Commission they were told about a director or partner within the Takatso Consortium who was already running a competing airline, which is uncompetitive,” said Ntshavheni.

No uncompetitive behaviour was allowed in any business, she said.

But this is what we know so far about the deal.

Gordhan said new valuations had changed the complexity and nature of the deal. During Covid SAA’s value was sitting at R2.4 billion. But after the pandemic new valuations were conducted and the value of the airline increased.

Takatso said it pulled out of the deal because the “revised transaction” had created “risk and uncertainty.”

It said despite signing the deal two years ago, it agreed to re-negotiate the share purchase agreement.

“These negotiations have been protracted, and the resultant revised transaction structure has introduced unacceptable levels of risk and uncertainty.

“Given the magnitude and materiality of the of the proposed changes, it had also become clear that the transaction would possibly need to be re-submitted for competition regulatory processes, which would have further compounded the complexity and drawn out the process even further,” said Takatso.

It added that the new terms of the deal were not acceptable.

Ntshavheni said on Thursday Cabinet gave the green light for the deal to be scrapped because it was not in the best interest of the country.

She said they were protecting SAA and its assets when government decided to pull the plug on the deal.

The chairperson of the portfolio committee on public enterprises, Khaya Magaxa, said they welcome the scrapping of the deal.

“We welcome the decision by the Cabinet to terminate the Takatso consortium deal. This allows us to re-evaluate and refine the processes we have been undertaking to ensure the best outcomes for our South African Airways. We remain committed to promoting transparency and accountability in the sector.”

But Gordhan said new valuation was the cause of the deal not to go through.

He said there were two valuations that were undertaken in the last four years. The first one was done during Covid and at the time SAA flights had been grounded.

“The business and the properties were valued at a liquidation asset valuation methodology and this amount to R2,4bn. And the business was valued at between 0 and negative.”

But after Covid market conditions changed and the business started improving.

There was now a demand for flights after many countries allowed visitors to come in.

This required another valuation for the airline.

“The business valuation came out at R1bn and the property valuation at R5.5bn. This meant that there was a net increase in the property by R3,1bn in the value of SAA. The equity value had increased from 0 to R1bn.”

Takatso said the new terms of the deal were not workable and they had to go through the Competition Tribunal. This was a cumbersome process.

This would have also required the repeal of the SAA Act, which was withdrawn in parliament a few weeks ago.
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Re: SAA after Business rescue

Unread post by Volo »

With Takatso gone ( not that I think it was ever there- just a smoke screen) their present capital structure and current trading loss and very low capital base I don't believe they are viable.
Six months from now they will be asking for another bailout.
Their foray in to long haul is ill conceived, as they will find out in the coming months.
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Re: SAA after Business rescue

Unread post by snoopy »

And now Pravin is retiring.... hmmm. :idea:

Not that, that will save his skin from any criminal investigation going forward.
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Re: SAA after Business rescue

Unread post by Mouser »

snoopy wrote: Fri Mar 15, 2024 7:37 am And now Pravin is retiring.... hmmm. :idea:

Not that, that will save his skin from any criminal investigation going forward.
No chance, he knows where very many skeletons are located, he is safe as houses, well, properly built ones :D .

Someone else has booked me flights to Windhoek on SAA in September as par of a group. Will they still be around?

When I heard I suggested good travel insurance.
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Re: SAA after Business rescue

Unread post by Airplaneguy9 »

Allegedly SAA has enough cash to stay afloat for between 12-18 months.
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Re: SAA after Business rescue

Unread post by Volo »

Airplaneguy9 wrote: Fri Mar 15, 2024 10:03 am Allegedly SAA has enough cash to stay afloat for between 12-18 months.
..........................................................................

Thats how long it will take to burn the R1 billion they have just received . They have burned through a R1billion ( your and my Billion) in the last year and thats in the good times . Why did parliament give them permission to use my money like that ?
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Re: SAA after Business rescue

Unread post by GL »

Volo wrote: Fri Mar 15, 2024 11:27 am
Airplaneguy9 wrote: Fri Mar 15, 2024 10:03 am Allegedly SAA has enough cash to stay afloat for between 12-18 months.
..........................................................................

Thats how long it will take to burn the R1 billion they have just received . They have burned through a R1billion ( your and my Billion) in the last year and thats in the good times . Why did parliament give them permission to use my money like that ?
Actually they didn't- the R1billion was to pay for already budgeted yet old Business Rescue debt - its not to fund current operating expenses.
They may in fact be operating cash positive but whether they can afford to make proper provisions for maintenance and end of lease commitments is another matter.
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Re: SAA after Business rescue

Unread post by Volo »

GL wrote: Thu Feb 15, 2024 8:47 am And so SAA reports a loss - of R776m over 9 months - despite being just a fraction of its former size it is still on track to lose R1 billion this year.
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https://saflyer.com/saa-makes-a-loss-of ... -9-months/
........................
I am not sure that this isnt a simple statement of a current trading loss - doesn't look like cash positive to me.?
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Re: SAA after Business rescue

Unread post by Volo »

Here's where I think SAA V2 is going .
They have or are about to receive Pravins Billion Rand that he said he would never give them .
There has been no clamour from the portfolio committees or anyone it seems of importance about this broken promise to the taxpayer.
This keeps them going for a year or so and gets repeated again because they are judged to be viable and no one objected to the last bailout.
Another year or two of what will then be less than a steller performance but adequately displayed as viable to the great unwashed .
Parliament wil then be requested to invest big money to recapitalize their burgeoning Airline .
Where in all this is the competition committee that is allowing this unfair competition .A state run airline that can pitch its prices anywhere they like because there are no direct financial implications for them . They are not having to show returns on their capital let alone an operational profit .
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Re: SAA after Business rescue

Unread post by Whirly »

Volo wrote: Sat Mar 16, 2024 11:52 am Here's where I think SAA V2 is going .
They have or are about to receive Pravins Billion Rand that he said he would never give them .
There has been no clamour from the portfolio committees or anyone it seems of importance about this broken promise to the taxpayer.
This keeps them going for a year or so and gets repeated again because they are judged to be viable and no one objected to the last bailout.
Another year or two of what will then be less than a steller performance but adequately displayed as viable to the great unwashed .
Parliament wil then be requested to invest big money to recapitalize their burgeoning Airline .
Where in all this is the competition committee that is allowing this unfair competition .A state run airline that can pitch its prices anywhere they like because there are no direct financial implications for them . They are not having to show returns on their capital let alone an operational profit .
It's all under the veil of "transformation" (the old "apartheid" has a new name, but will still be used when needed), so we have to wind our necks in.

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