South Africa has terminated a deal to sell a stake in its national airline after failing to agree on a value and other terms with a consortium of private investors.
The government had since 2021 planned to sell 51% of the loss-making South African Airways (SAA) to the Takatso Consortium, as part of efforts to end recurring bailouts of the flag carrier.
After three years of negotiations, Public Enterprises Minister Pravin Gordhan on Wednesday said the deal had been called off “as there is no clear path forward”.
Mr Gordhan cited the impact of the post-pandemic market as a significant factor in the decision, leading to a revaluation of SAA’s worth.
“We are convinced that SAA can sustain itself in the next year to 18 months and that there are various other ways in which immediate financing can be obtained,” he added.
In a statement, the Takatso Consortium said the changes in the deal to buy SAA would have taken too long to achieve.
SAA will now revert to being fully state-owned but the government said the airline was open to entering into other partnerships.
The collapse of the deal is a blow to President Cyril Ramaphosa’s efforts to sell off non-performing state entities and bring state debt under control.