Business News: SAA Skeletons Come to Light During Acquisitions
- Embattled airline SAA and Takatso Consortium's 51% sale has seemingly caused a few problems, which are reportedly being resolved
- There are also concerns that were raised with the airline's business rescue process, which began in 2017
- The Auditor-General allegedly did not complete the audits during the process and during the Scopa meeting it was revealed that the 2020 financial statements were incomplete
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Issues have come to light due to the sale between South African Airways (SAA) and the Takatso Consortium, which is seeking a 51% share in the embattled airline.
31 March, 2017 marks the last time SAA audited financials for the end of the year. The Auditor-General failed to complete any audits during the business rescue process. Draft financial statements for the years 2018 and 2019 were sent to Parliament in 2020 by the BRPs.
At the Scopa meeting held on 25 March, it was obvious that the financial statements for the end of 2020 were not complete despite the 2021 financials being due.
Source: Getty Images
SAA and Takatso
The due diligence between SAA and Takatso still needs to be implemented and run. SAA’s intangible assets, such as the Star Alliance and its brand, could hold some weight in terms of value while the route, flight and staffing plan will be decided.
Media reports
According to reports by MoneyWeb, SAA was in critical debt with the prime enterprise tasked with SAA's maintenance; SAA Technical fell into a downward spiral while subsidiaries such as Mango dealt with problems arisen by creditors.
IOL reported that independent aviation economist Joachim Vermooten said that SAA’s debt needs to be erased by the government due to the airline requiring R14 billion to repay debt while R10 billion had already been promised by the government
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More issues with SAA
Briefly News previously reported that the Public Investment Corporation (PIC) together with the management of civil servant pensions, has confirmed that it holds 30% of Harith General Partners. Harith is an infrastructure investment group that is a part of the consortium set to hold the majority stake in South African Airways (SAA).
The PIC, currently monitoring over R2 trillion mostly from the Government Employees' Pension Fund (GEPF), confirmed on Monday, 14 June, in a statement that it holds 30% of Harith General Partners. It also revealed that some of the people involved in Takatso Consortium may have previously had dealings with the PIC.
Public Enterprises Minister Pravin Gordhan stated on Friday that the Takatso consortium of Harith General Partners and Global Aviation would hold a majority 51% stake in SAA, while the state holds the remaining 49%.
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Source: Briefly News
