South Africa has cancelled a deal to sell a stake in its national airline after failing to agree on the value and other terms with a consortium of private investors.
The government had been planning to sell a 51% stake in loss-making South African Airways (SAA) to the Takatso consortium since 2021 as part of efforts to end repeated bailouts of the flagship airline.
After three years of negotiations, Public Enterprises Minister Pravin Gordhan said on Wednesday that the deal was called off “because there is no clear path forward.”
Mr Gordhan cited the impact of the post-COVID-19 market as a key factor in the decision that led to the reassessment of SAA’s value.
“We are confident that SAA can survive the next 18 months and that there are various other options for immediate funding,” he added.
The Takatso Consortium said in a statement that it had taken too long to implement changes to the SAA acquisition agreement.
SAA will once again be fully owned by the government, but the government has said it is open to other partnerships for the company.
The failure of the deal is a blow to President Cyril Ramaphosa’s efforts to sell off state units in crisis and rein in the national debt.