Exorcising Dudu Myeni’s ghost | Fin24

Exorcising Dudu Myeni’s ghost

Nov 12 2017 06:00
Dewald Van Rensburg

From now on, the CEO of SAA would actually be allowed to run the place, said Finance Minister Malusi Gigaba and new board chair Johannes Bhekumuzi “JB” Magwaza at this week’s “unveiling” of the airline’s new board.

The ghost of SAA’s recently deposed chair Dudu Myeni was felt even though no one mentioned her by name.

“It will be very important going forward that we have a very clear delineation of roles between the shareholder, the board and the CEO,” said Gigaba.

“The CEO runs the airline, he has to implement the measures. The CEO is the spokesperson of SAA. Not the shareholder and certainly not the chair.”

Magwaza stayed on message: “One problem here was the lack of clear delineation of roles. If these get blurred, you have a formula for chaos and gemors. The job of running the company belongs to the CEO and his managers.”

SAA has to hold an annual general meeting before the end of January. This was originally scheduled to take place at the end of October, but was postponed due to the financial statements, which could not in good faith present the airline as a “going concern”.

After a recent R10 billion government bailout, the statements have been sent to the Auditor-General, said Gigaba.

SAA’s tardy financial statements have postponed the company’s annual general meetings every year for four years, and this will be the last time, said the minister.

Half of the R10 billion has been paid over to SAA so that it can pay its creditors and the rest will be paid to SAA in monthly instalments of about R1 billion until April, said Gigaba.

New chance for old ideas

Gigaba is well acquainted with the turnaround strategy he this week instructed the new SAA board to implement.

In 2013, when he was public enterprises minister, Gigaba was the person who publicly announced the very same strategy.

It calls for an amalgamation of the three state airlines – SAA, Mango and SA Express – and an optimisation of their fleets.

That seems to mean ensuring aircraft sizes are better matched to routes by taking smaller planes out of Mango and SA Express to service regional routes in African countries where SAA’s larger planes lose money.

The plan is still to sell a part of SAA to a private investor.

This was announced as a probable solution by the previous minister of finance Pravin Gordhan in his 2016 Budget Review.

Gigaba said that this process was now in the new board’s hands.

They will determine what percentage to sell and try to gauge the investor appetite, he said.

“Many people have shown an interest even before we said we want it,” he said.

“Airlines and financial institutions,” he added.

He promised that the partial privatisation would be done in the full light of day with no “underhanded, in-the-dark-type engagements”.

It will be the second time a minority share of SAA gets sold – 20% was handed to Swiss Air in 1999 for R1.4 billion.

Swiss Air went bankrupt shortly after that, and SAA bought back the shares in 2002 for less than R400 million. 

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