LEGAL CHALLENGE
Why a minority investor wants to halt Acsa tariff cut
Acsa minority shareholder African Harvest Strategic Investments worries the tariff reduction will hit its bottom line
A minority shareholder in Airports Company SA (Acsa) has filed papers on an urgent basis to interdict new airport charges taking effect in April, citing concern about profitability. African Harvest Strategic Investments (ASHI), which holds a 1.4% stake in Acsa, filed the papers seeking to interdict a 35.5% tariff decrease in 2017. ASHI is worried that the tariff reduction, which is part of a regulatory process, will decrease its return on investment to 4.7%, from 11.5%. In its notice filed to the High Court in Pretoria on Monday, ASHI also cited the fact that the new tariff regime would slash Acsa’s profit by R1.85bn, or 67%, in 2017-18. Acsa generates almost two-thirds of its revenue from the service charges it levies on users, including airline passengers and carriers. The Acsa economic regulator, which is housed in the Department of Transport and advises the minister about tariff rates, sets the tariff rates factoring in the potential for abuse of monopoly and allows for a reaso...
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