New SAA interim chair Derek Hanekom says he is “not a rubber-stamp kind of person”.
- SAA’s new interim chair, former tourism Derek Hanekom, says he’s been told a strategic equity partnership deal with the Takatso Consortium may be finalised in months.
- Hanekom says it’s too soon for him to be able comment on SAA’s equity deal, but this was the timeframe given to him by Minister of Public Enterprises Pravin Gordhan.
- He added that he had faith in the airline and its value to SA, while its new interim board wouldn’t just “rubber-stamp” decisions.
- For more financial news, go to the News24 Business front page.
The deal between South African Airways (SAA) and its chosen strategic equity partner, the Takatso Consortium, will hopefully be concluded within the next four months, its newly appointed chair Derek Hanekom has been told.
The Department of Public Enterprises (DPE), the debt-laden airline’s shareholder, announced the appointment of an interim board of directors on Monday, which is expected to be in place until a new strategic equity deal is finalised.
“I can’t comment on the Takatso deal. Minister Gordhan indicated that he expects it to be concluded in the not-too-distant future. He is confident that it means within the next four months,” Hanekom told News24 on Tuesday.
Investment firm Harith and Global Airways, owner of the LIFT airline, are the Takatso partners. Gordhan announced the deal already in June 2021, with Takatso expected to hold 51%.
Despite SAA getting another R1-billion bailout in the 2023 Budget to settle legacy debt, the DPE estimates another about R2.5 billion is needed. In terms of a so-called receivership created to house SAA’s legacy debt when it exited business rescue, the third and last payment to creditors is due in August this year – also about four months.
Takatso has made it clear it will not take on any of SAA’s legacy debt and the deal cannot be finalised until it has been settled. Takatso has indicated it will inject about R3 billion into a new SAA, in other words only after it comes on board once all the legacy debt has been settled and regulatory approvals obtained.
The Competition Commission and other regulators are currently reviewing the Takatso deal.
The interim board has not had a chance yet to look at what still needs to be done to finalise the deal.
“SAA has turned a corner. The airline is not in a crisis. Although the financials for the last financial year still has to be finalised and tabled, it is looking positive,” said Hanekom.
“SAA currently flies to some other African destinations, and is looking at resuming some international routes. Of course, it is much smaller than before [business rescue], but it is no longer a loss-making airline. That is positive.”
Not a rubber stamp
Asked what the point would be of making decisions, for example, on route expansions, before Takatso takes over, Hanekom said it would be “crazy” not to pursue plans to strengthen the airline in the meantime. Any proposals for route expansions will be subject to scrutiny by the interim board.
“Insofar as any expansion is rational and profitable, why would Takatso want to reverse it later? It would be in Takatso’s and the state’s favour,” said Hanekom.
He laughed when asked why he decided to come out of “semi-retirement” and head up SAA’s interim board.
“Some say it is because I am masochistic, while others say I am a sucker for punishment. But it is because I believe in the national carrier and its value for the country. I believe SAA can get back to where it was before, although just in a different form,” says Hanekom.
“When Minister Gordhan approached me, we had a long discussion, and I did not hesitate [to accept]. This is an exciting challenge worth taking on. I did some research, and the potential for SAA is there. It is just a matter of unlocking opportunities it does not want to lose. It has a good brand reputation.”
He said that the interim board is certainly not in place just to “rubber-stamp” decisions.
“I am not a rubber-stamp type of person. This interim board has to ensure the airline’s compliance, and any further expansion will be carefully considered. I honestly feel confident about SAA’s growth,” said Hanekom.
SAA’s interim CEO, prof. John Lamola, has indicated in the past that, in his view, SAA could continue sustainably even if the Takatso deal did not materialise.
Asked about that, Hanekom said he does not entertain such an option.
“We get our mandate from the shareholder and Minister Gordhan. The plan is to [conclude] this Takatso arrangement. Prof. Lamola’s view, however, can be seen as an expression of confidence in the airline. We are certainly not standing still for now. Matters are being attended to. There are no alarm bells to worry about,” said Hanekom.
The other interim directors are finance professional Fathima Gany, former Airports Company of SA (ACSA) chief operating officer Fundi Sithebe, finance and business strategist Mahlubi Mazwi, corporate and compliance lawyer advocate Johannes Weapond, financial and corporate restructure expert Clarissa Appana, and economist and strategist Dumisani Sangweni.
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