Tanzania’s government has approved a $20-million bid by South African Airlines (SAA) for 49% of state-owned Air Tanzania Corporation.
South African Airlines was named the sole bidder for the Air Tanzania Corporation (ATC) stake last month, after Kenya Airways withdrew on concerns that the bid would affect its shareholder value.
This will be the first time that state-owned SAA, Africa’s biggest carrier, has acquired a stake in an airline outside South Africa.
”SAA has offered to pay $10-million to the government for the 49% shares in ATC and to inject $10-million into a capital and training account at ATCL to finance the business plan it has proposed for turning around the airline,” the Parastatal Reform Commission (PRSC) said in a statement released late on Wednesday.
The new company, part owned by the government and part owned by SAA, will be called Air Tanzania Company Ltd (ATCL).
The statement signed by PSRC Executive Chairman John Rubambe said transaction agreements would be signed early in November with handover targeted for the end of the same month.
Privatising ATC, which plans to sell 75% of its shares, is part of a programme of reforms encouraged by Western donors aimed at boosting economic growth in Tanzania, one of the world’s poorest countries.
The acquisition of ATC is part of South African Airlines’ strategy to establish a strong East African hub based in Dar Es Salaam, the statement said. – Reuters