Johannesburg – Takatso Aviation on Wednesday said it “welcomes” the provision made in the Finance Minister Enoch Godongwana’s budget for the appropriation of R1 billion to South African Airways (SAA).
The provision is a partial fulfilment of the government’s commitment to settle the airline’s historical debt, initially quantified at around R13.5 billion.
“The bulk of the original amount has already been settled,” Takatso Aviation said in a statement issued by Thulasizwe Simelane, Takatso Aviation Spokesperson.
“This appropriation stems from the processes that led to SAA’s exit from the business rescue process (BRP) in April 2021.
“It is a commitment made by government as a shareholder to the BR creditors prior to Takatso Aviation being chosen in June of that year, as the preferred SAA Strategic Equity Partner.”
Takatso Aviation said the budgeted R1 billion will settle “some, but not all” of the outstanding amount.
“It, therefore, falls short of what it would have taken for government to completely clear this obligation, which is one of the conditions for the finalisation of the SAA Transaction with the SEP,” Takatso Aviation said.
“The partial fulfilment of this obligation is not what Takatso Aviation had expected.
“We will therefore have to assess the impact thereof on the progress of the transaction.”
Commenting on the matter, Takatso Aviation Director Lizeka Matshekga said: “The unease Takatso Aviation funders have with signing off on the release of the funds we’re mobilising for our R3 billion commitment to SAA, while the outstanding BRP debt subsists, is an issue we have highlighted time and again”.
Matshekga added: “Part of the context for this unease is the well-known fact that this debt burden stems from SAA’s past financial distress.
“We, therefore, need to assess whether a partial fulfilment of government’s undertaking to clear this debt changes anything, in our financing process.”
However, Takatso Aviation reiterated its commitment to seeing the transaction to finality.
Takatso Aviation said it was engaged with the Competition Commission to finalise the merger clearance.
“Takatso Aviation is looking forward to building SAA up as an agile, sustainable, and commercially viable African airline that will stimulate and transform the aviation sector, while also flying the South African flag high,” said the statement.
Takatso Aviation said it was also in ongoing engagements with the government for an appraisal of the situation about the final settlement of its outstanding financing obligations emanating from the BRP.
“We look forward to more discussions with government in the coming weeks, on the BRP obligations issue, as well as the other conditions still to be fulfilled to accelerate the transaction to finality,” said Takatso Aviation.
“We also wish to emphasise that in the context of an ever-evolving market, time is of the essence if the parties to the agreement are to seize the current moment characterized by a buoyant aviation sector.”
