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South African airlines buyout will not affect KQ deal, says Joseph

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Kenya Airways chairman Michael Joseph during the airline's half-year results' briefing at the KQ hangar on August 27, 2019. PHOTO | DIANA NGILA | NMG

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Summary

  • KQ chairman Michael Joseph said Takatso Consortium, which is acquiring a 51 percent stake in the ailing South African carrier, has been involved in all the steps of negotiations since the talks began sometime last year.
  • The two airlines have planned to consolidate their assets and form a Pan-African airline following the meeting between President Uhuru Kenyatta and his South African counterpart Cyril Ramaphosa last year.

The takeover of South African Airways (SAA) by a new buyer will not affect the plan to form a Pan-African Airline with Kenya Airways #ticker:KQ .

Kenya Airways (KQ) chairman Michael Joseph said Takatso Consortium, which is acquiring a 51 percent stake in the ailing South African carrier, has been involved in all the steps of negotiations since the talks began sometime last year.

The two airlines have planned to consolidate their assets and form a Pan-African airline following the meeting between President Uhuru Kenyatta and his South African counterpart Cyril Ramaphosa last year.

“I do not expect (the acquisition to affect the partnership) so as they have been involved in these discussions from the beginning,” said Mr Joseph in an interview with Business Daily yesterday.

The Takatso Consortium comprises two companies, Harith General Partners and Global Airways. Harith is a major investor in African infrastructure and airports, while Global Airways is a South African aircraft leasing firm.

Mr Kenyatta said in December last year that the two airlines will combine their assets to form a Pan-African carrier as early as this year. Mr Joseph said the two airlines are meeting often to finalise the deal of consolidating the two carriers.

“We have regular meetings with SAA and our plan is now to expedite this partnership,” he said.

The partnership would see SAA receive a $221 million boost from the strategic partners. The Takatso Consortium will own the controlling stake while the South African government will hold a 49 percent.

The consortium says the intention of acquiring a stake at SAA is to list the airline in the future as one way to address funding requirements.

Takatso Consortium confirmed in November that the due diligence process to buy a 51 percent stake in the state-owned flag carrier was complete and all was set for takeover after being cleared by the regulatory authorities.

It is expected that the partnership will improve the financial viability of the KQ and SAA airlines. Customers will also benefit from more competitive price.

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