South Africa buys back airline stake
The South African government said on Thursday that it is buying back the SwissAir Group's 20 per cent stake in South African Airways for 382.5 million rand ($33.3 million).
The South African public enterprises minister said the price, one billion rand less than SAA was sold for three years ago, was agreed fair value less a 15 per cent default discount stipulated in the shareholders' agreement.
The SwissAir Group collapsed in October when a fall in traffic after the September 11 attacks exposed the fragility of its financial position. An administrator is now selling off its assets to raise money for creditors.
The conglomerate acquired a mountain of debt through misguided investments in foreign airlines, though the SAA holding was one of its better buys.
The South African government's sale of the stake in SAA was a first step towards full privatisation that has now been delayed because of market volatility.
A task force is now being set up to draw up a restructuring plan for the airline.
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