Global Aviation and Syranix representative, Gidon Novick has reacted to the claim by the Competition Commission that those two companies have agreed to pull out of the deal which will semi-privatise SAA.
The Competition Commission of South Africa has stated that in order for the Takatso deal (in which the Takatso Consortium buys 51% of state-owned SAA) to move forward into finality, the Commission demands that the two minority partners in the Consortium, Global Aviation, together with consultancy Syranix, leave the Consortium.
The progress of the deal has been stuck at the Competition Commission for almost a year.
The Commission found that if the transaction were to go ahead, with Global Aviation and Syranix, which co-own the LIFT brand as minority shareholders of the Takatso Consortium, the effect of the deal would be to decrease competition in the South African domestic passenger airline market. The Commission’s concern was that Takatso would have access to SAA’s competitively sensitive information by virtue of its majority stake in SAA, after the proposed merger. The Commission believed this was exacerbated by the fact that the domestic passenger airlines market was highly concentrated and barriers to entry were high.
“The merging parties have therefore agreed that Global Aviation and Syranix will completely divest from Takatso prior to the merger,” said the Competition Commission’s statement.
But, co-founder of LIFT, Global Aviation/Syranix representative and former Takatso CEO,Novick, says there is no agreement in place for Global and Syranix to divest from Takatso, nor to sell their minority stake.
Novick spoke to Travel News, saying: “We were approached by the DPE to acquire a 51% stake in SAA early in 2021 when LIFT was already operating.
“At the request of the DPE, we partnered with Harith to form Takatso. Our team was to be responsible for industry expertise as minority shareholders, and Harith as majority shareholder, was to supply the funding.
“Our team spent several months putting a deal structure together as well as building and presenting a sustainable business model for SAA going forward.”
“Over the course of 2022 I was not updated on the progress of the transaction, nor the raising of the funding. (I’m still in the dark as to funding). I resigned from the board of Takatso, as I was not able to fulfil my fiduciary responsibility as a director.” See report in Travel News here.
“We have not agreed to divest from Takatso/SAA and remain open to finding a way to share the deep local skills and experience we have, in order to build a sustainable regional and international airline and an iconic South African brand.
“If our skills are no longer required, we would remain as minority shareholders without board representation and with no access to any competitively sensitive information. Would it be a problem if, for example, Raymond Ackerman owned shares in Shoprite Checkers?
“LIFT’s focus is currently on the domestic trunk routes (not regional, nor international). It’s common industry practice for airlines to co-operate in several ways, an example being SAA and Airlink’s previous partnership.”
Novick pointed out the historic DPE-owned stakes in four airlines simultaneously (SAA, Mango, SA Express and Airlink.
