Johannesburg | Thursday
SOUTH African President Thabo Mbeki said his government would try to limit damage from the withdrawal of Swissair’s 20% investment in South African Airways (SAA), state radio SABC reported on Wednesday.
The Pretoria government, which holds the remaining 80% of SAA, would look closely at what happens to the troubled Swiss company before deciding on the next step, he said.
Swissair announced in Zurich on Monday that it would divest its stakes in foreign airlines. It has filed for bankruptcy protection and grounded its aircraft for lack of cash to buy fuel.
Swissair paid $230-million (250-million euros) in 1999 for its 20% stake in SAA, and an additional four million dollars for an option to buy a further 10% stake before the end of this year.
The company recently valued its holding in SAA, which last month reported a loss of R735-million ($79-million, 86-million euros) for 2001, at R845-million and put a goodwill value on the stake of R790-million.
Mbeki said that before the crisis brought about by the September 11 terror attacks on the United States, Swissair had indicated that it would not pull out from SAA.
Economists said that Swissair’s withdrawal presented South Africa with an opportunity to buy back shares in SAA cheaply and re-evaluate its plans to privatise the airline.
“Swissair pulling out is an opportunity … if the government wants to rethink privatisation, it will not cost as much,” said the research director for Johannesburg-based the National Institute for Economic Policy, Asghar Adelzadeh. – AFP