Billionaire private investor Rob Hersov will be directly approaching the Department of Public Enterprises with a daring R2 billion bid to buy six regional airports owned by the state.
Speaking exclusively to Business Report while in Europe on Saturday, Hersov confirmed that an informal offer he and his business partner Nick Ferguson made for the airports was completely rejected by the government.
Hersov said they were not bidding for Airports Company South Africa (Acsa) as was rumoured, but instead said his company RSA.aero would bid for regional airports.
These regional airports are George, Gqeberha, East London, Bloemfontein, Kimberley and Upington, and would add to the Cape Winelands Airport RSA.aero already owns on the outskirts of Cape Town.
Hersov said they saw this as an opportunity to save these assets as his team comprised individuals with the necessary capital, skills and expertise to unlock value and turn these airports into successful money-making enterprises.
“We are going to make an unsolicited bid, a formal one to the minister (of Public Enterprises), to Pravin Gordhan. We want to secure the support of the Public Investment Corporation (PIC), which is a shareholder in Acsa, and we want to secure support from other areas of influence,” Hersov said.
“Selling the regional airports to investor-operators like us who have the funds and the relevant skills is a chance to save and grow the regional airports. We are interested in buying only the six regional airports of Acsa and we will pay R2 billion for them, and also invest a significant amount going forward in upgrading and improving them.”
Investors have probably been emboldened by the government’s willingness to get private sector participation into strategic state assets following the acquisition of the majority stake of South African Airways (SAA) by Takatso Consortium.
On Friday, the Department of Transport revealed that it had been approached by prospective investors who expressed interest in acquiring equity in Acsa for an undisclosed amount of money.
Acsa owns and operates South Africa’s nine principal airports, including three international gateways; OR Tambo, Cape Town and King Shaka International Airports, and also participates in equity investments abroad and provides technical advisory and consultancy services to airports.
Acsa’s shareholding is divided between the government at 74.6 percent, the PIC at 20 percent, and seven other minority shareholders splitting 5.4 percent among themselves.
However, the government declined the offer, saying that Acsa was not only a “strategic national asset” with an important role to play in South Africa’s economic reconstruction and recovery, but also in enabling the growth of the aviation sector in Africa.
Transport Minister Fikile Mbalula said that it was on this basis that the government had no intention to divest the equity it holds in Acsa, in favour of private shareholding in the foreseeable future.
“We welcome the interest prospective investors continue to show in our country and in our public entities,”Mbalula said.
“We will continue to engage with these investors with a view to direct these investments to projects that we believe will add appropriate value to our service delivery mandate across the sector, and not equity.”
But Hersov retorted, saying that if the ANC government really believed these were strategic assets, then it should sell them to private investors as quickly as possible.
Hersov said he had little faith that the current government could run a successful business after what has become of SAA, Transnet and Eskom.
He did not mince his words as usual, saying that the government was “fundamentally incompetent and extremely corrupt”.
“So they should as quickly as possible sell state-owned enterprises to private operators who bring money and expertise,” Hersov said.
“Leaving these things in the government’s hands is a sure-fire way to have them destroyed as they’ve done with everything else. Our government is useless, fundamentally incompetent and extremely corrupt.”
BUSINESS REPORT