The carrier is among a number of South African state-owned companies to have deteriorated into a state of financial distress over the past several years, in large part due to mis-management and corruption, reports Bloomberg.
A consortium comprised of Johannesburg-based Global Airways, which owns recently launched domestic airline Lift, and venture capitalist firm Harith General Partners will take a 51 per cent of South African Airways.
Public Enterprises Minister Pravin Gordhan said the government will retain a minority stake. The rand strengthened on the news, trading 0.5 per cent firmer at 13.55 to the US dollar.
The grouping named Takatso will invest as much as ZAR3.5 billion (US$258 million) over the next three years, said Lift co-founder Gidon Novick and Harith CEO Tshepo Mahloele.
'Government will have no further financial obligations to the company, outside of the existing liabilities that they will settle,' Mr Novick said. 'Route networks we are still working on, and it will be a phased roll-out based on demand re-emerging post Covid.'
The sale of S comes about six weeks after the airline emerged from lengthy bankruptcy proceedings, having reduced its workforce by almost 80 per cent and cut liabilities to about ZAR2.6 billion.
The next challenge is to resume international flights, though South Africa remains cut off from much of the world due to Covid travel restrictions.
The S disposal marks the first effective privatisation of a major entity since the sale of former phone monopoly Telkom SA SOC Ltd. two decades ago.
A longer-term goal is to list the carrier on a stock exchange, Gordhan said. In the meantime, the government will retain special voting rights to ensure the airline remains in the country, among other national priorities.