Suspended public enterprises DG was involved in SAA sale process: department

Suspended public enterprises director-general (DG) Kgathatso Tlhakudi was part of the process of disposing of 51% of the government’s shareholding in SAA to a strategic equity partner (SEP) last year.

This is according to the department of public enterprises, which issued a press statement on Monday threatening legal action over “false and distorted” information about the process and on the leakage of official information.

The department rejected as misinformation reports that Tlhakudi was not involved in the SEP process. “This is incorrect. The director-general was involved in the process.”

“He engaged with the potential SEPs when the non-disclosure agreement (NDA) was signed. He also communicated the outcome of the expression interest to the parties.

“Furthermore, the letter of acceptance of Harith General Partners as the preferred bidder for SAA was signed by the DG,” said the department.

It said Tlhakudi was also involved in engaging with local and international parties wishing to invest in SAA, was intimately involved in the SAA transaction and engaged with the media in the process.

The sale and purchase agreement was signed by acting DG Jacky Molisane on February 22 because Tlhakudi was on sick leave, said the department. He was privy to the agreement and its contents or terms and conditions, it said.

There have been media reports that public enterprises minister Pravin Gordhan shut Tlhakudi out of involvement in the SAA deal despite being the accounting officer for the department. The reports claimed this was because Tlhakudi disagreed with Gordhan on the valuation for SAA, which in the sale and purchase agreement was R51.

The department has also sought to clarify the role played by Rand Merchant Bank (RMB) in the transaction.

It said RMB was appointed as a transaction adviser to select a strategic partner for SAA.

“RMB undertook the first phase of the evaluation process which entailed initial evaluation phase of expressions of interest,” said the department.

It said on August 24 2020, Harith General Partners notified the department of public enterprises of its interest in becoming a bidder through a formal expression of interest.

“It was then contacted by RMB on the 25th of August 2020 to formally join the process.”

The second and third processes, which entailed the selection of shortlisted parties to enter into strategic discussions on the potential fit and commencement of due diligence, negotiation and signing of transaction agreements, were conducted by the department.

The department didn’t go into the details of the offers made by parties in this process, citing a non-disclosure agreement.

It said the impact of the Covid-19 pandemic on global aviation became increasingly debilitating worldwide and some of the parties who had expressed an interest in the process could not provide the capital required to operate the airline.

“All interested parties made it clear government had to take responsibility for all historic costs inclusive of bank debts. From the interested parties, Harith General Partners was willing to provide the funding for the new airline and it partnered with Global Aviation for aviation management expertise, and they formed Takatso Consortium.”

Previously, the National Treasury revealed it was not part of the process of disposing of the 51% of the government’s shareholding in SAA.

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