By Gordon Bell
The government has agreed to buy back 20 percent of South African Airways (SAA) from the SAirGroup (Swissair) for R382,5-million, said Public Enterprises Minister Jeff Radebe on Thursday.
Briefing reporters in Cape Town, he said once the transaction was complete parastatal Transnet would own 100 percent of the national airline.
Swissair would then relinquish all rights "previously exercisable under their shareholder agreement", and its two directors on the SAA board would resign.
The Swiss company bought the 20 percent stake in June 1999 for R1,38-billion, with an option for a further 10 percent, but ran into serious financial difficulties last year.
The airline filed for a moratorium on debt enforcement towards the end of 2001 which resulted in a default in terms of the shareholder agreement with Transnet.
Cabinet approved the repurchase in November last year.
Radebe said the repurchase price was equal to an agreed fair value of the shares, less a 15 percent default discount that was stipulated in the shareholder agreement.
"This re-acquisition purchase price was informed primarily by the volatile market conditions prevalent in the airline sector, which had been impacted inter alia by a significant economic global downturn and the impact of 11 September 2001."
Due to the significant discount, Transnet had agreed that in the event of it reselling a stake of at least 10 percent of SAA within 18 months, the company would pay 50 percent of any gain to Swissair, in proportion to the percentage resold.
Asked to comment on the price paid for the shares, he said: "In 1999 20 percent was sold to Swissair for R1,382-billion, this year when we bought it back, we bought it at R382-million. I think the figures speak for themselves."
Swissair had, in its interim results in 2001, valued the SAA investment at about R1,6-billion.
Radebe said government and Transnet would continue discussions with SAA on its appropriate future business model.
A task team comprising representatives from the departments of public enterprises, environmental affairs and tourism, trade and industry, the national treasury, Transnet and SAA would work on new restructuring options taking into account the events of September 11 and the downturn in the global airline industry.
These would then be presented to cabinet.
"Government and Transnet would like to acknowledge the constructive and supportive role that the SAir Group has played and the positive spirit in which the negotiations to terminate were concluded," he said. - Sapa