SAA vows to seek equity partner immediately amid funding crunch
South African Airways will “immediately” start looking for a strategic equity partner, according to its CEO Vuyani Jarana.
This is included in a recent letter that Jarana wrote to trade union Solidarity.
Jarana said that, while SAA leadership initially believed the airline should first “get into shape” in order to make it attractive for potential investors, funding pressures dictated that it start looking for a strategic equity partner immediately.
The trade union shared the letter – dated June 27 – with the media on Tuesday on a report back briefing about the loss-making airline. About half of Solidarity’s members work at SAA.
“The shareholder and the board of SAA have agreed to commence the process of a strategic equity partner,” wrote Jarana, in response to a list of questions Solidarity has posed.
“Once the project plan has been finalised, SAA would be happy to share that with Solidarity through a structured engagement. We can project the start of the process, however, we cannot guarantee whether there will be appetite in the market. We therefore would not be able to commit to [a] deadline for completion of the SEP process, it depends on the market.”
In April Solidarity had said it would consider heading to court to have the cash-strapped airline placed under business rescue.
On Tuesday, Solidarity’s chief executive Dirk Hermann said in a statement the union would suspend its application “for the time being”.
“It is difficult to immediately proceed with litigation if the other party has conceded in writing to most of our demands,” he said. — Fin 24