Low cost airline 1Time has sealed a deal with a black economic empowerment consortium that will acquire a 25% stake in the group for nearly R50 million, which will be used to expand 1Time’s operations and acquire more aircraft.
The consortium purchased 70 million shares worth R49 million, effective from March 2, the 1Time group said on Wednesday. When first announced in November last year, the deal was valued at R65.1 million.
The consortium includes Mtha Aviation, SKMT Sunrise Investment Group and Oakleaf Investmetn Holdings. The latter was formed to acquire and hold the stake in 1Time, with Mtha Aviation owning the majority of Oakleaf. Sipho Twala, a founding shareholder and chairman of 1time, is also part of the BEE consortium.
“We want to grow three areas, expansion focused on the Lanseria operation, growing routes into Africa, and maintenance,” Orsmond said, adding that 1Time is scheduled to start flying out of Lanseria in the third quarter of this year and will buy two new aircraft to fly new routes from the airport. Up until now, 1Time’s rival Kulula has had exclusive use of Lanseria. 1Time will also use the new money to improve its maintenance division facilities at Safair Technical.
1Time’s new partners will not only contribute capital but will also bring aviation experience, as Mtha Aviation is involved in aviation training and aircraft maintenance. “We look forward to partnering with the BEE consortium as their solid track record, entrepreneurial spirit and aviation expertise will provide a perfect fit with the 1time culture,” 1Time Group CEO Glenn Orsmond said in a statement earlier this week. “The funding will give impetus to our growth plans for the airline by introducing new routes into Africa and the Lanseria operations.
1Time hopes to secure air traffic rights to fly into Zimbabwe and to Lusaka in Zambia, the Sunday Tribune reports. It already flies to Livingstone in Zambian. The airline would also like to fly to Lubumbashi and Kinshasa in the Democratic Republic of the Congo.
“Our vision has always been to create a diverse aviation group consisting of the best low cost airline in southern Africa and a world class maintenance facility. This transaction has significantly strengthened our BEE credentials and shareholding and we believe that the move will assist us in realising our vision,” Orsmond said.
The black empowerment deal would benefit the airline during its expansion into new African routes as the licensing council made note of BEE credentials when awarding licenses, Orsmond said.
As part of the deal, Busiwe Maqungo has been appointed as executive director and Blacky Komani non-executive director of the company. At the moment, Maqungo is the managing director of Mtha Aviation while Komani is chairman of the company.
“Our participation will focus on the synergies that already exist between the BEE Consortium and 1time, in order to leverage maximum value from the anticipated growth in passenger numbers in Africa,” said Komani. “The BEE consortium offers expertise that will maintain and enhance 1time’s competitive edge, thereby delivering sustainable value for all stakeholders. We anticipate growth in our market share through an improved range of offerings to our loyal customers, and have very exciting expansion plans in place.”