Transnet “sells” SA Express to DPE

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Transnet, the state-owned transport group has “sold” profitable regional airline SA Express to the Department of Public Enterprises for R140 million in a deal backdated to April 1, 2007. 

The company has also been reimbursed for the about R336 million it had advanced to the airline after that date.

 

The transaction, announced Friday, also provides for Transnet to be released from all the guarantees, indemnities and warranties it had provided as a shareholder.

 

Transnet acting CEO Chris Wells says the proceeds from the sale as well as that of some rail assets would be redeployed into the group`s R80-billion infrastructure investment programme.
“These disposals will enable Transnet to be focused solely on running the core businesses of the company as part of positioning them for growth,” added Wells.

 

Business Day newspaper last month reported that the regional airline was expected to post an improved profit for the six months to March this year, “in stark contrast to its rivals”, including South African Airways (SAA) which was expected to post its third full-year loss in the next few months.

 

The paper added that in the year to September SA Express (SAX) posted a net profit of R201 million — boosted by a 14.3% rise in turnover. This stands in contrast to a warning by the International Airlines Association (IATA) in March that the global airlines industry is “in intensive care” and that African airlines will lose at least US$600 million this year – six times more than last year – as a result in the fall-off in business travel, tourism and air freight as a result of the global recession.