Funds needed to restart SAA ‘not committed’

Gidon Novick, who until last Monday sat on the board of the consortium planning to buy a 51 per cent stake in South African Airways (SAA), believes the funds needed to restart the national carrier have not been made available.

The Takatso consortium consists of Global Aviation Operations – which would provide the necessary aviation expertise and is represented by Novick – and Harith General Partners, responsible for raising the R3 billion needed to restart the airline.

Novick resigned as Takatso’s CEO last week, citing a lack of transparency and information that hampered his ability to fulfill his fiduciary duties as director of the consortium.

Speaking to Moneyweb, Novick said at the time of his resignation it appeared the R3bn had not been pledged.

“The deal always needed two things. It took skills and it took capital; We should be the skills and Harith should bring the capital.

“I assume they’re both in [doubt now] because on the issue of capital, which was one of the issues I needed to understand better as a director, it certainly appears that it has not been committed.”

Reason for resignation disputed

But Tshepo Mahloele, CEO of Harith General Partners and chairman of the consortium, said the issues surrounding Novick’s resignation centered on a conflict of interest that the team has been managing since February.

During an RSG Geldsake interview with Moneyweb editor Ryk van Niekerk, Mahloele said Novick had requested sensitive information SOBusiness activities of which could not be passed on to a competitor.

Novick is a co-founder of start-up airline Lift, which will be in operation for two years on December 10.

Mahloele also said Lift approached SAA about a potential codeshare, interline and profit-sharing partnership.

Moneyweb’s attempts to reach Mahloele were unsuccessful.

Novick, in turn, said Lift’s management had not requested any sensitive commercial details regarding SAA.

Global Aviation is focused on financing which is “obviously a very significant part of the deal”.

“The simple question was, ‘Has capital been tied up?’

“I don’t think anyone expects this capital to be in the bank at the moment, but has it been committed, even if there is a condition?”

Novick also dismissed claims that Global Aviation had asked for R1 billion for Lift’s merger with SAA, and called for management of control of the airline after the merger, according to a Sunday Times report.

Global Aviation retains its stake in Takatso.

This article originally appeared on Moneyweb and has been republished with permission.
Read the original article here.

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