Review to merge SAA, SA Express at an advanced stage

Thursday, May 11, 2017

Cape Town – Finance Minister Malusi Gigaba says the work of assessing the viability of a merger between South African Airways and SA Express is done, pending a government review.

He said this during his maiden appearance as Finance Minister to answer oral questions during a question and answer session in the National Assembly on Wednesday.

Minister Gigaba’s remarks come after former Finance Minister Pravin Gordhan announced in the Budget Speech on 24 February 2016 that he, together with the Public Enterprises Minister Lynne Brown, agreed to explore the possible merger of South African Airways (SAA) and South African Express (SA Express) under a strengthened board, with a view to engage a potential minority equity partner and create a bigger and more efficient airline.

Minister Gigaba said National Treasury and the Department of Public Enterprises jointly adjudicated the bids received in response to the tender that had been issued.

Subsequently, government appointed Boston-based management consulting firm, Bain & Company, and South African consulting and advisory firm, Abacus Advisory, to assist government to undertake a comprehensive assessment of all options before reaching a final decision on the optimal ownership and corporate structure of the State-owned airlines.

“The work is complete and the next step is for government to review the options and recommendations to allow an informed decision to be taken on how to proceed, including alignment to the review currently underway on SAA’s long-term turnaround strategy.

“The review by government will determine whether equity partners, if any, would become part of the ownership structure of the State-owned airline assets,” he said.

Minister sets the record straight on recent US trip

Meanwhile, Inkatha Freedom Party (IFP) MP Mkhuleko Hlengwa asked the Minister who he had invited to join him on his recent trip to the United States and the reasons, if any, of those invited for not honouring such an invite.

The Minister said: “The official trip to the United States in April 2017 was not a roadshow. We went to attend the IMF [International Monetary Fund] and World Bank annual Spring Meetings. As such, we did not invite any people or groups to join us,” he said.  

The Minister went on to say that government remained committed to cultivating partnerships with business and labour in order to foster inclusive growth.

“It is important at this stage, where we are, for us to continue cultivating strong strategic partnerships with business, labour and other social partners. We are committed to ensuring that we engage different stakeholders on different levels to restore our relationship with them to boost those strategic partnerships and ensure that we can continue working together to address the challenges faced by the South African economy.

“It is my considered view that even if the economy was growing at 5% or more, and we had restored our investment grade, we would need to continue to cultivate such strong partnerships with different social partners for the good of the economy and country.

“It is important for us that we should welcome the commitment by various social partners to work with us in addressing these challenges,” he said.  

Minister Gigaba said commitment by business and labour and by social partners is welcome.

“However, I also want to state categorically that it is absolutely untrue that they were invited on this trip and that they declined participating in the trip. The trip was to attend the IMF and World Bank’s annual Spring Meetings and the delegation to those meetings is the delegation of the National Treasury, led by the Minister of Finance.” – SAnews.gov.za

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