Issued by: Government Communication Information System
21 November 2001
Cabinet re-affirmed its commitment to the accelerated restructuring of State Owned Enterprises by approving two key Safcol transactions. Cabinet further confirmed its approach in dealing with each restructuring initiative on the basis of the balance of evidence. This has been clearly demonstrated in Cabinet's decision to support Transnet in re-acquiring SAA shares from the SairGroup (Swissair).
1.1 KWAZULU-NATAL PACKAGE
We are pleased to confirm the sale of 22 000 hectares of Safcol Commercial Forestry Assets in KwaZulu-Natal to the Siyaqhubeka Consortium. The transaction , valued at close to R100 million, has been approved by the Competition Commission, and will now become effective, following the fulfilment of all conditions precedent.
The consortium comprises of Mondi Limited and its empowerment partner, Imbokodvo Lemabalabala Holdings (IL:Holdings). Provision has also been made for the National Empowerment Fund to hold 10% of the shares with an appropriate Community Trust, aimed at supporting neighbouring communities, holding 5,4% of the shares. This sale is tangible proof of the good that can come from a partnership between business and the community. It also supports the increase of black and community representation in the forestry sector.
1.2 NORTHERN PROVINCE AND MPUMALANGA FOREST ASSETS - PROGRESS WITH DIVESTITURE
Cabinet confirmed AFC and Paharpur as preferred bidders for the above forestry assets. AFC Zama Consortium is a black owned company that has a broad shareholder base. Paharpur is a diversified company, based in Calcutta, India, and has as its black empowerment partners, Sefateng Investment Holdings.
It is anticipated that intensive negotiations will continue with both bidders to finalise the ultimate preferred bidder.
2 SAA
Cabinet approved Transnet's proposal to re-acquire 20% of Swissair's shareholding in SAA. The problems confronting Swissair over the last six months, were worsened by the events on the 11th of September 2001, resulting in Swissair seeking a moratorium of debt enforcement via the Swiss courts.
This action constituted a default by Swissair, in terms of the Shareholders Agreement between the SairGroup (Swissair) and Transnet. This default has provided the basis for Transnet to re-acquire the 20% stake from the SairGroup, in accordance with the provisions in the Shareholders Agreement (ie. 85% of fair value). In arriving at this decision, several options were considered, including third party acquisition of shares and an equity market public offering. These options were discarded as a result of current volatility in the airline sector. Government will review its restructuring options for SAA going forward, after the reacquisition of SAA shares has been finalised.