SAA remains a financial burden, Treasury warns

SOUTH Africa’s decision to sell a majority stake in the country’s loss-making national airline SAA represents an ongoing financial risk to the state as the terms were skewed heavily toward the buyer, the National Treasury concedes.

The finer print of the deal that saw the Takatso Consortium take a 51% shareholding in SAA last year represents a “contingent liability,” the Treasury said in a document emailed to Parliament’s Standing Committee on Public Accounts that was later withdrawn.

That’s partly because Takatso – made up of a local jet-leasing company and private-equity firm – has the right to assess whether any ongoing liabilities in SAA be settled by the government, the Treasury said in the document seen by Bloomberg.

Gordhan, a former finance minister, had made the removal of SAA from the state roster a key tenet of his role overseeing the Department of Public Enterprises, which also counts debt-laden utility