Funding needed to relaunch SAA ‘has not been committed’, cautions Novick

Gidon Novick, who until last Monday sat on the board of the consortium that plans to acquire a 51% stake in South African Airways (SAA), believes the funding required to relaunch the national carrier has not been committed.

The Takatso Consortium comprises Global Aviation Operations – which would provide the required aviation skills and is represented by Novick – and Harith General Partners, which is responsible for raising the R3 billion required to relaunch the airline.

Novick resigned as Takatso CEO last week, citing a lack of transparency and information that hampered his ability to fulfil his fiduciary responsibilities as a consortium director.

Speaking to Moneyweb, Novick said that at the time of his resignation it seemed the R3 billion had not been committed.

“The deal always needed two things. It needed skills and it needed capital; we were supposed to be the skills, and Harith was supposed to bring the capital.

“I suppose they are both in [doubt now] because on the question of the capital, which was one of the questions I needed to understand better as a director, it certainly seems like it has not been committed.”

Reason for resignation disputed

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

Speaking during a RSG Geldsake interview with Moneyweb editor Ryk van Niekerk, Mahloele said Novick had requested sensitive information about SAA’s operations that could not be divulged to a competitor.

Novick is co-founder of startup airline Lift, which on 10 December will have been in operation for two years.

Mahloele also said Lift had approached SAA about a possible codeshare, interline and profit-share partnership.

Moneyweb’s attempts to reach Mahloele were unsuccessful.

Novick in turn said Lift’s management has not requested any sensitive commercial detail regarding SAA.

Global Aviation is focused on the funding, which is “obviously a very material part of the deal”.

“The simple question was ‘Has that capital been committed?’

“I don’t think anyone is expecting that capital to be in the bank right now, but has it been committed, even if there’s a condition?”

Novick also rebutted claims that Global Aviation had asked R1 billion for Lift to merge with SAA and requested managing control of the airline once joined, as per a Sunday Times report.

Global Aviation retains its stake in Takatso.

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

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