The South African government has terminated the sales agreement for state-owned South African Airways that it entered into almost three years ago.
South Africa's Department of Public Enterprises had planned to sell 51% of the carrier to an investment consortium called Takatso. The sales agreement was ended by mutual agreement, the DPE said. Takatso has not responded to an email requesting comment.
DPE said the deal fell through because the parties could not come to terms on a revised transaction price after the value of SAA increased. The original sales agreement was reached in June 2021, during a period when the bankrupt airline had suspended operations during the Covid-19 pandemic. At the time, the carrier was appraised at a liquidation value of 2.4 billion South African rand (about $128 million).
The airline emerged from a yearlong hiatus early in fall 2021 and resumed transatlantic flying last fall. SAA currently operates a fleet of 11 aircraft, according to Planespotters.net, though it has not resumed flying to the U.S. In a more recent valuation, the airline was determined to be worth 6.5 billion rand ($348 million).
"It became clear in the negotiations that the revised transaction structure must take into account public interest and fair market price. However, these requirements were not met in the renegotiations," the DPE said.
The government said it will next explore alternative SAA financing. In addition, an aviation strategy advisor will be brought on to support the SAA board.
"We are confident that SAA will continue to fly and grow in terms of the number of routes and aircraft that it is able to lease," DPE said.