WEDNESDAY, 10.30AM
The soon-to-be-privatised Sun Air is only likely to realise between R50-million and R90-million — much less than the R200-milion originally estimated, government sources said on Tuesday.
With the deadline of Thursday for finalists to make non-binding offers on the airline, it is suggested that the paucity of information on its operations will keep the sale price below R90-million. The airline has not made huge profits and its net assets are worth around R75-million. In addition, to remain competitive, the airline will need an immediate R400-million recapitalisation.
Meanwhile, it is believed that Air France, facing privatisation at home, is about to pull out of the bid process, while Air Malaysia was on Tuesday in last-minute negotiations with a black empowerment consortium to determine whether it will continue with its bid. It is a government criterion of the sale that prospective buyers should include a black empowerment consortium.
Sun Air competitor Comair is also believed to be intent on making a bid, having teamed up with the Rethabile consortium. A successful Comair bid would make Comair a formidable competitor to SA Airways in the domestic market, taking its share to over a quarter of the local passenger market.